If you’ve ever had a savings account, you may have noticed that it’s kind of a pain to withdraw from savings. Not only do you often have to physically go into the bank (or wait for the funds to appear in your check account if you bank Online) but withdrawing from savings just doesn’t feel right. Because of these two difficulties in withdrawing from savings, having a savings account can curb spending. How? Well, consider this:

You’ve just paid the bills for the month, groceries have been paid for, there’s nothing more you need. Instead of having those funds sitting in your checking account, burning a hole in your pocket, put them somewhere that is not easily accessible… like a savings account.

If you save your money for a rainy day not only will you be able to have the comfort of knowing there’s extra money if you need it, but you’ll earn interest on it! Okay, so it's not a lot of interest, but money saved is more valuable than money spent. It's always nice to have that extra money set aside for emergencies. It's not fun to have to use it during emergencies, but it's better than having to use a credit card.

Just remember not to put too much money in savings, you should have at least $100 in “padding” in your checking account at all times in case something happens such as an error that would otherwise cause you to overdraft. It’s better to pay for things with money from a checking account (or cash) in emergencies than it is to use a credit card. This is because credit card companies charge interest and the interest they charge is much higher than any interest that you could earn from having money in savings. This also is why it's a good idea to pay off those credit card bills before socking away a lot of extra money in savings (although everyone should have at least a little bit of money in savings.)

If you have a checking account, go to your bank and ask about opening a savings account. It is a good idea to open a savings account at the same bank where the checking account is because some banks will pull money from savings in the event of an overdraft instead of charging an overdraft fee. Note that I said "some" banks, not very many banks do this and many of the ones that do charge a fee for this. This is one of the many reasons I use a credit union instead of a bank. Because of this, I will use the words "financial institution" to denote both banks and credit unions, because the one you choose to use is your choice (although I highly recommend a credit union.) When applying for a savings account at your financial institution, you need to be aware that they may require a minimum deposit that must stay in there at all times. When I applied for a savings account at the credit union, they required a minimum balance of something like $5 which wasn't a problem for me.