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Posted in Saving Money
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cellab667

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how much should be saved monthly

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The "ideal" savings account will be sufficient to cover necessary living expenses for at least 6 months, though a year would be better.  Save as much as you can and, since we can't see your financial information, only you can make the decision.  Years ago, I saw an article indicating that it's best to save 10% of your net income every month and live on the other 90%. Start with even $5/mo, and do so consistently, building up as circumstances permit. Just get started now!

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That depends on who you ask.

Finacial guys will tell you you need to save 25% or more of your income every month.  For most of us that isn't possible. We need to live. 

You need to set up your own financial plans so your working with real numbers.  it takes a little time but its worth it in the long run. 

First priority should be a your emergency fund.  Set this up at your local credit union. Keep this account in a seperate bank,  makes it harder for you to raid it on a whim. Put everything your can into it, This will be a savings account with a goal of at least a full years worth of income in it. Reality dictates that you first reach a more realistic goal, Set a 6 month goal. This would equal to what it costs to live for 6 months, Rent, utilities car payments insurance etc. This will be the minimum you want to keep in this account long term.  As you build credit then your available credit would also be counted toward your emergency fund as well.   Set up a minimum monthly transfer from your checking to the savings account. If you find a little extra cash in your budget put it into savings as well. Keep making deposits until you reach that years income goal. Once you reach that 6 month goal then split your deposit between the Emergency fund and start depositing into a retirement account s well.  

     That money is not to be touched ever, Its there to offset your expenses only should you lose your job.  

Once you have reached that 6 month cash savings goal its time to set up another account. I call this the Christmas account, I use it to pay off credit cards after christmas, but also use it for gifts etc. through out the year. Again this is an automatic transfer from my checking to the savings as well. I transfer $47 a week. this gives me about $2500 a year for gifts, concert tickets and other little splurges with out incurring debt. I also use this account when I'm saving up for things like a down payment on a car loan or any other big cash outlay.  If you can afford to you could set up a third account where you put a little bit away to save up the a down payment on a home or a car.  Theres nothing like the feeling of  walking into a dealership and being able to ask, "Whats the price for Cash", It can save your $10K on a new car! 

Once your have an emergency fund and a splurge account then Retirement should be your big goal.  Insecurity about weather how long Social Security will be around  means that you may have to pay for your all of your own retirement.  Consider, if you live 25 years  live past retirement and how much it costs you to live now and you probably come up with a number that is about $1.25 milliion, thats if you can live on $50K a year in the future. That does not include adverse things such as medical care or other big emergencies. That should be your minimum retirement savings goal.  Over your carreer you will probablky have a 401K or 2, maybe an IRA. All these are combined towards your retirement goal. 

Saving is a lifetime commitiment because its your life that relys on it. 

Good luck 

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