Karima is looking forward to the freedom of owning her own car. "I plan to get a used car," she says. "Something simple. I just want to be able to get away on the weekends or in the evenings and go where I want." She wants to buy a car within the next year, and she is saving her money so she can purchase it without getting a loan.

To save money and earn interest, she deposits about 20% from each paycheck into a high-interest savings account that she opened online. Because her money isn't in her checking account, she says it is less tempting to spend. Plus, she earns interest on all her savings.

Karima's first investing experience came 10 years ago, when her grandfather opened a CD in her name. Since then, she has regularly renewed this CD, and the money in it has doubled. Eventually she wants to expand her investments into areas with more opportunities for growth, like mutual funds; but for now she is focused on having enough money on hand for her upcoming car purchase and to build a financial cushion for herself. "It's always good to have an emergency fund," she says. "Once I save enough for my car, I want to keep saving and have enough to last me for up to three months, in case something happens."

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