To put your short-term savings into context, think of your finances as a wedding cake. The bottom layer is your long-term savings. Your goal is to grow that long-term money into a solid and strong foundation for your finances. Ideally, it will eventually be the biggest piece of your cake, broad enough to support a long and active retirement. (Stocks are ideal for this.) However, as the bottom of the cake, it is also the least accessible. Leave it alone until the proper time has come -- otherwise, your cake will crumble.

Shorter-term savings appear in the ingredients of the second tier. This is the big-ticket fund you plan to spend within about five years. It might be five years' worth of living expenses if you are already retired, a college fund if you have older kids, or a down payment for a house. This is also where you stash money earmarked for the new roof, new car, or even a major vacation. CDs or short-term bonds can be used for these predictable expenses. Being the middle tier, it should be accessible sooner than the money in the bottom layer, but not before you need it.

The top tier of the cake is your rainy-day fund, your peace-of-mind money. It's there for medical emergencies, car-repair emergencies, pink-slip emergencies. Think of it as the credit card-avoidance fund, if you like. This money needs to be readily available -- but not so readily available that you spend it on everyday things. A money market account with check-writing privileges would be a good place to keep it, but your regular checking account probably would not. You don't want to start thinking that a trip to Cancun is an emergency.

Learn how to best deploy your short-term moola in our Savings Center. Our All About Banking area should also be of interest. And you can learn all about brokerages and find one that's right for you in our Broker Center.