We plan our vacations, what we are to wear, or even what we are going to make for dinner. But when it comes to our finances, we often just “wing it.”

This is no way to approach our finances. Regularly putting some money aside into savings is crucial during these times, when there is insecurity in Social Security, instability in our jobs, and other financial challenges.

Be prepared

One of the key principles of obtaining financial freedom is being prepared for what tomorrow brings. At present, you may be living the “good life,” with a steady job or flow of income.

But what happens if your income stops, an unexpected expense arises, or you suddenly become ill? Simply put, you must save for a rainy day.

Pay yourself first

Paying yourself first requires putting a few dollars aside in your savings account. You also must understand the purpose of each dollar that comes into your possession beforehand.

It is not enough to simply save. Instead, earmark dollars to help you reach specific financial goals. Prepare a financial plan and constantly review it to make certain you are moving toward your financial goals.

Build an emergency fund

Use some of the dollars you save to establish an emergency fund. Keep this money in an account that is liquid, which simply means it can easily be converted into cash.

Certain accounts such as money market accounts, certificates of deposit, Treasury bills and other short-term investments may be appropriate for emergency funds.

It is important to avoid spending any money in your emergency fund unless a situation arises that really is an emergency.

Remember: your choice, your future!

Kemberley Washington is a certified public accountant and a business professor at Dillard University. Subscribe to her personal finance blog at Kemberley.com. Follow her on Twitter and on Facebook.

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