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When I was six-years-old my dad took me to Universal Campus Credit Union—BYU's official financial institution of that day—to deposit the hard earned $21 I had saved from weeding and cleaning cupboards. He matched it by adding his own $21 to the account. I was rich!

Each time I made more money, I added it to the account and my dad matched it. That was the deal. And I was a saver.

My dad and I had another deal. The first time he made a lump-sum million dollars, I'd get a horse.

Somehow in my little 6-year-old head, I combined the two deals. I knew that if I just earned half a million dollars—and deposited it in my savings account—my dad would match it…and I'd have my horse.

Further, I knew that $50 was half of a million. So I was almost there.

A few short months later I was disabused of the idea that $50 and $500,000 were equivalent. (I did get better at math and the base ten system.) A couple of years later I had enough to buy my first, used, orange 10-speed bike. And I still have the same savings account (although now UCCU stands for Utah Community Credit Union).

Savings accounts aren't making much money these days. When you can get a low interest rate on your mortgage, that's coupled with a low interest rate on most investments as well. Consequently, when we have large cash funds to set aside, we rarely use savings accounts.

Today we use our savings accounts as a place to save up for short-term purchases. For example, I deposit my affordable web design services income into a savings account at my local credit union. When enough has accumulated for a needed purchase, that money is transferred to our checking account. The advantages are:

• Local bank is convenient
• Money in savings is less accessible and more likely to accumulate
• Interest rates are slightly higher than checking accounts

Using this method, we have paid cash for numerous expenses such as: home furnishings for our new house, playground equipment for our yard, wedding expenses, etc. Savings accounts are also great places to save up for Christmas gift purchases. Just budget a bit and deposit it every month. (Better yet, arrange an automatic withdrawal from your checking account each payday.) Then when Christmas rolls around, you'll be stress-free with your spending.

When you open a savings account for your special purchases, look for one with competitive interest rates and no monthly fees. Be sure to check the fine print so you know just what you are getting!

Alison Moore Smith is a 61-year-old entrepreneur who graduated from BYU in 1987. She has been (very happily) married to Samuel M. Smith for 40 years. They are parents of six incredible children and grandparents to two astounding grandsons. She is the author of The 7 Success Habits of Homeschoolers.