by Tom Karlin

Created on: February 19, 2009   Last Updated: March 06, 2009

Anyone who is self supportive or has dependents, understands the benefit of saving money for an emergency. Being unprepared for an unfortunate circumstance such as losing a job can potentially be one of the most stressful times in life. If you don't have a nest egg saved away, worries can cause additional stress for you or your family, perhaps resulting in health problems.

One thing you can do with your money is to place it in a no-fee, higher interest bearing savings account. Instead of impulse spending, if you can afford to contribute a few extra dollars each paycheck into a safe bank account, you will be doing yourself a huge favor . We are experiencing an unprecedented time in our history where the economy is faltering on collapse. This includes the stock market and the mortgage industry. Just a few years ago, economists told us to pour our money into retirement savings accounts and the stock market. Although that may have been a good decision at the time, these so called money experts seemed to have crawled back into the woodwork. Tragically, many people have lost a high percentage of their retirement savings due to the terrible state of the stock market as a result of this economy. Many people may not be able to recover these losses by the time of their retirement and may be forced to work longer than expected, while facing an uncertain future.

Placing as much as possible into a savings account means that money is safe for the future and secured by the FDIC in some cases up to $250,000 for IRAs and SEPs and $100,000 in savings and checking accounts, certificates of deposit (CDs), money-market deposits, and trusts. This means that even if your bank or institution were to go out of business, the government would cover your losses up to this amount. Anything more in the account would not be covered and therefore not subject to recovery. However there are ways of insuring larger amounts than $100,000 are protected. For example a couple of ways are by creating a separate joint account for a married couple as well as opening up a revocable trust account where each partner is named as a beneficiary.

No one can be certain of the economic future as we have seen recently, which took most financial experts by surprise. This is why it is imperative to prepare for the worst case, by contributing what you can to a savings account while you are employed. That doesn't mean to give up plans of purchasing items you're working hard to buy. It means giving yourself insurance by having extra money in the bank, in case you need it in an emergency situation. You'll sleep better knowing you and your family are protected for awhile longer until you can get back on your feet.

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