Most Americans have different bank accounts to serve different needs, from basic checking accounts for daily transactions to certificates of deposit for long-term savings. If you have multiple savings accounts, at least one should be devoted to an emergency fund. In fact, money blogger and influencer Dasha Kennedy says you shouldn’t consider a savings account and emergency fund the same thing.

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In a recent Instagram post, Kennedy referred to savings accounts and emergency funds as “cousins, not twins.” The self-proclaimed “financial activist” also laid out some of the main differences between savings accounts and emergency funds:

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Savings Account

In her post, Kennedy wrote that a savings account is “ideal for planned expenses and achieving short- to medium-term financial goals.” She also called a savings account “perfect for setting aside money for specific future purchases or experiences.”

Example: If you’re planning to buy a new laptop next year, use money from your regular savings account.

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Emergency Fund

This fund is “strictly for unexpected, urgent expenses that you can’t cover with your regular income or other savings,” Kennedy wrote, adding that the fund should serve as a “financial safety net for emergencies.”

Example: If your car breaks down unexpectedly and requires immediate repairs, dip into your emergency fund to pay for it.

Which Expenditures Warrant Savings vs. Emergency?

Here are some other guidelines Kennedy shared in terms of which expenditures should come out of which account:

Scenario	Savings Account	Emergency Fund Advertisement
Planning a vacation
Sudden job loss
Buying holiday gifts
Saving for a new phone
Medical emergency Advertisement
Buying concert tickets
Unexpected home repairs
Sudden legal expense
Planning for a baby shower
Unexpected travel expenses Advertisement

The amount of money you should keep in your emergency fund depends on different factors, most having to do with your location, household size, income, and monthly expenses. As a general rule, you should aim to save enough money to cover at least three to six months’ worth of expenses. A good place to build an emergency fund is in a high-yield savings account that can help you grow your balance faster.

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This article originally appeared on GOBankingRates.com: Difference Between Savings Account and Emergency Fund, According to Financial Activist Dasha Kennedy

Two experts believe Aussie homeowners won’t get any mortgage relief until at least 2026. The Reserve Bank of Australia (RBA) decided to hold interest rates at the 13-year high of 4.35 per cent following its two-day September meeting.

Not a single expert from Finder’s research was tipping a cut from this meeting and the overwhelming majority (15) believe the first round of cuts will happen in February 2025. But Richard Holden, Professor of Economics at UNSW Business School, told Yahoo Finance homeowners should expect to hold their breath longer — much longer.

“We’re not going to solve this inflation problem by cutting rates. We’re going to make it worse,” he said.

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He and Malcolm Wood, Ord Minnett’s head of institutional research, reckon the first rate cut won’t come until sometime in 2026.

The RBA has been insistent that inflation has to come into the 2-3 per cent range before rates should be cut.

Governor Michele Bullock said a lot of work needs to be done to get inflation down and all but ruled out a rate cut this year.

Will you be forced to sell your home if the RBA doesn’t cut rates this year? Email stew.perrie@yahooinc.com

At the post-meeting press conference, Bullock said the bank isn’t convinced inflation is moving in the direction it needs for a cut.

“The board needs to be confident that inflation is moving sustainably towards the target before any decisions are made about a reduction in interest rates, so we really need to see progress on underlying inflation coming back down toward the target,” she said.

Where is inflation at the moment?

Data from the Australian Bureau of Statistics (ABS) shows inflation has fallen dramatically since the 2022 peak of 7.8 per cent.

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On Wednesday, new figures revealed it dropped to its lowest point in nearly three years to just 2.7 per cent in the 12 months to August, which is down from 3.5 per cent in July.

But a big factor in that fall are the state and federal electricity subsidies handed out after July 1.

Holden said it’s “misleading” to focus on headline inflation because it can be swayed by things like government handouts.

He said the number to keep your eyes on is trimmed inflation, which is also called core inflation or underlying inflation.

This “smooths out the impact of temporary or irregular price changes” like from subsidies and excludes the top and bottom 15 per cent of price changes to give a more accurate reflection of what’s going on in Australia’s economy. The economist said that number is much harder to move.

“Underlying inflation is a long game,” he told Yahoo Finance.

The RBA also noted that trimmed inflation has been particularly sticky over the past few months.

“Our current forecasts do not see inflation returning sustainably to target until 2026,” it said in its September meeting notes.

“In year-ended terms, underlying inflation has been above the midpoint of the target for 11 consecutive quarters and has fallen very little over the past year.”

Trimmed inflation came in at 3.4 per cent for August, which is still a considerable drop from the 3.8 per cent in July.

Economist and Yahoo Finance contributor Stephen Koukoulas has argued the RBA should feel comfortable cutting interest rates soon based on headline inflation.

“The RBA is refusing to cut interest rates because it is guessing that the step lower in inflation in August will be temporary, a call that is based on faith not facts,” he wrote.

“In the end, the markets embraced the low inflation result and yet again discounted the RBA view of the economy by pricing in a better than even chance of a 25 basis point interest rate cut before the end of 2024 and a total of 125 basis points of interest rate cuts by the end of 2025.”

But what about other countries cutting their interest rates?

The US Federal Reserve announced last week it was finally reducing its interest rates from a 23-year high.

In a near-unanimous decision, the rate was slashed by 0.5 percentage points to a range of 4.75 to 5 per cent.

It was the first rate cut since 2020 and experts are predicting there will be two more rate cuts by Christmas, four more cuts in 2025 and twice again in 2026.

Inflation peaked in the US in June 2022 at 9.1 per cent and is now at 2.5 per cent.

The US’s move brought it in line with other major nations including the European Union, the UK, Canada, New Zealand, Denmark, Switzerland, China, and many others.

Federal Reserve Chairman Jerome Powell said waiting longer to reduce the federal funds rate compared to other nations “really paid dividends” as it allowed policymakers to get more comfortable about the downward path of inflation.

Holden said Australia will likely have to follow a similar path.

“It’s a real shame that we didn’t do what the US and the UK and Canada and Europe and New Zealand did, which was take our medicine early on, raise rates more aggressively, deal with the problem, not be so lavish with government spending,” he explained to Yahoo Finance.

“You can see the fruits of that… look at America… that’s the story of what we should have done, and we haven’t done it, and we’re all paying the price for it.”

When do the Big Four banks think interest rates will drop?

Commonwealth Bank expects the RBA to cut rates in December 2024. It thinks there will be five 0.25 per cent cuts by the end of 2025, taking the cash rate to 3.10 per cent.

Westpac thinks there will be a cut in February 2025, with four 0.25 per cent cuts in total to bring the cash rate down to 3.35 per cent.

NAB thinks it will be in May 2025, although it says February is possible, with five 0.25 per cent cuts down to 3.10 per cent.

ANZ has forecast a February 2025 cut, with three cuts in total to bring the cash rate down to 3.60 per cent.

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TOKYO – New ruling Liberal Democratic Party leader Shigeru Ishiba, set to soon become Japan’s next prime minister, is considering naming former Chief Cabinet Secretary and health minister Katsunobu Kato as finance minister, sources close to the matter said Saturday.

Former Defense Minister Ishiba, the winner of the LDP’s presidential race on Friday, also plans to appoint former Environment Minister Shinjiro Koizumi as its election campaign chief, the sources said, as lawmakers brace for the possibility of a general election by the end of this year.

Ishiba, meanwhile, has decided to retain Yoshimasa Hayashi, known as a right-hand man to outgoing Prime Minister Fumio Kishida, as chief Cabinet secretary and the top government spokesperson. Hayashi previously served as foreign minister.

Kato, a former Finance Ministry bureaucrat, Hayashi and Koizumi were among the record nine candidates in the leadership race to choose the successor to Kishida, who did not seek reelection following a slush fund scandal that has hit the party.

Ishiba plans to launch the new LDP leadership on Monday. He is expected to become prime minister on Tuesday, as both houses of parliament are controlled by the LDP and its coalition partner, the Komeito party. He will then form a Cabinet on Tuesday.

The new president has decided to appoint Hiroshi Moriyama, the head of the LDP’s decision-making general council, as its secretary general, the party’s No. 2 position, while tapping former Defense Minister Itsunori Onodera as its policy chief, the sources said.

In his fifth presidential bid, Ishiba, who also served as the party’s secretary general, won 215 of the 409 valid votes cast by LDP lawmakers and rank-and-file members in a runoff vote on Friday, while economic security minister Sanae Takaichi secured 194.

Regarding the Cabinet lineup, senior vice finance minister Ryosei Akazawa, a close aide to Ishiba, is set to be given a ministerial post and transport minister Tetsuo Saito, a lawmaker of Komeito, is certain to be retained, the sources said.

Ishiba said at a press conference after he was elected LDP chief, “I will ask each of them (the other leadership candidates) to take the position that suits them best.” But Takaichi, who was narrowly defeated by 21 votes in the runoff, said, “I will support” Ishiba “as a member of parliament.”

Amid mounting speculation that Ishiba may dissolve the House of Representatives for a snap election in the near future, he apparently accelerated preparations on Saturday by having photos taken for campaign posters.

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