Financial expert Dave Ramsey believes one must save for a reason.

My husband and I are trying to work on a budget and we're looking at it from different perspectives.

He wants to put the least amount possible into the budget categories, and the rest into savings. I want us to save, invest and do some other things, but now we're only saving.

We have no debt. We make about USD 200,000 (Rs 7,895, 999) a year and save USD 100,000 (Rs 3,947,999).

I'd like to use some of the money to buy a new couch.

-- Mary

Dave says: Well, it's obvious that he's highly motivated by the word 'savings'. This isn't necessarily a bad thing, but there's got to be a balance and a strategy involved.

Save for a purpose

Savings are an important part of any healthy financial plan. But honestly, I think it's unwise to have savings just for the sake of having savings. You need very specific goals in mind -- a mission statement -- like a fully-funded emergency fund.

Set a time limit

Three to six months of expenses is a very tangible goal. You can work towards it and know when you have it in place. That way, when life happens -- and you know it will -- it doesn't turn into new debt and added stress.

You can do this with other things, too. Christmas and birthday presents are great examples, along with particular debts or items you'd just like to have once in a while -- like that new couch.

Tell him that, and let him know your financial counsellor agrees with you, because I do! I think you need to be saving money, but you need to be saving it with a specific goal in mind, and you both need to be in agreement on where the money's going.

Otherwise, you'll turn into Howard Hughes; sitting there unhappy with big piles of money and no mental health!

A little about Dave:
 
At 26, he had a net worth of a little over a million dollars. Life couldn't be more perfect. And then he lost it all, thanks to debt. That's when Dave went on a quest to find out how money really works, how he could get control of it, and how he could have confidence in handling it. On our pages, Dave will guide readers on all things related to money!

For more financial advice plus a special offer for our readers, visit www.davesays.org. This column is part of a series of columns by Dave, exclusively for you, dear readers!

Dave's earlier columns:

'We are just asset managers for God'

To get out of debt, get mad first!

Who holds the key to your house?

When in debt use common sense