Savings Basics — How Much Savings is Enough?

How Much Savings is Enough?

How much money should I save? It can seem like a tough question.

Most experts advise saving 10–15 percent of your earnings each year. If this is hard to do, start with a smaller percentage and work your way up.

Ten to fifteen percent of your income may feel like a lot at first, but consider the importance of what you are saving for:

  • Emergencies—Unexpected loss of income or major emergencies can quickly cause anyone to build up unwanted debt, or even face bankruptcy. Six months worth of income in an emergency savings account provides a safety net for you and your family.
  • Retirement—The lifestyle you can afford after retiring will depend on how much you saved during your working years.
  • Major Purchases—A down payment on a home can cost tens of thousands of dollars, or more. Many people save for several years to afford a down payment on a home of their own.
  • College Education—Higher education is an investment, and college tuition is increasing. By the time kids today apply for college, the cost will be even greater.

Look closely at your own financial goals, lifestyle, and future plans. Figure out how much money you will need in case of unexpected job loss, for major planned purchases, like a home or car, as well as for retirement.

My Money Goals

Want to buy a house? Reduce debt? Scroll through the columns below and select your goal to create a plan.

    • Please choose from the other list

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