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Without realising it, I've been an absolute pothead when it comes to saving! Of course, I don't mean that I've been a hippy - only that, without thinking about it, I've been dividing up my savings into three distinct "pots". Hence, I've decided to name my approach "The Three-Pot Savings System". Here's how it works: Pot one: My safety net Pot one is very simple: it's simply a rainy-day fund. All of us should have one of these emergency funds, to tide us over when fate catches us out. You know the sort of thing: you lose your job; the boiler gives up the ghost; your car breaks down; a huge bill arrives; and so on. Depending on how cautious you are, you need to stash away between three and twelve months' living expenses. So, if you need at least £1,500 a month to pay your way, your safety-net fund should be between £4,500 and £18,000 – or even more, if you're ultra-cautious. My rainy-day money goes into a Best Buy easy-access savings account. You'll find several accounts that pay 5% AER or more in our Savings centre. Pot two: My wishes pot This pot is actually several different pots grouped together. It's for my hopes, dreams and aspirations for, say, the next five to ten years. My approach here is to save a set amount each month by Direct Debit or standing order, plus throw in the occasional lump sum. This money is earmarked for having fun or buying "big things", such as paying for Christmas, buying a new car, or taking an expensive holiday. Building up this pot enables me to avoid borrowing money to meet large, one-off expenses. Having conquered two mountains of debt during my adult life, I never want to deal with a third! Part of this money is in cash, with some held in cash mini-ISAs to earn high rates of tax-free interest. I'm comfortable with exposing some of this money to stock-market risk. Hence, the remainder is held in low-cost, simple, flexible stock-market vehicles, such as index-tracking iShares. Pot three: My future pot Again, this pot is made up of several distinct pots with a common theme. The idea here is to play a long-term game. Including in this pot is a mishmash of past pensions, plus my company Stakeholder scheme. It also includes long-term investments in shares ISAs, which the taxman can't touch, plus savings and investments for my children. This pot also encompasses shares that I hold in my online broking account, plus a hotchpotch of paper certificates. I've owned several of these shares since the Nineties, and I'll probably hold them for many years to come. I see no point in randomly trading in and out of various companies, as all this does is increase my dealing expenses. This is my "passive", sleep-well-at-night portfolio – and it's the pot that will make me a millionaire several times over one day! Anyway, however you decide to save, take good care of your pots! More: Check out our Savings, Index Tracker and ISA centres.