How Much Money Should You Save Every Month?
If you save as much as you can throughout your life, you shouldn’t have much stress as you approach retirement age. Of course, everyone saves different amounts because everyone’s financial situation is unique. What works for you might not work for someone else. If you’re having trouble sorting through your personal finances, or you just want an expert to review your situation, consider talking to a financial planner at a credit union. Here’s a quick look at how much you should be saving each month as you start planning for your future.
Since people’s income varies widely, many financial experts recommend saving a percentage each month. A typical recommendation is to save at least 10% to 20% of your income. Some people are able to save more, others less. It may not be possible to save 20% of your income if you live on a $30,000 salary and have significant medical expenses, for example. Just try to save as much as you can every month, and be on the lookout for new ways to cut expenses and increase savings.
Within your overall savings, you should have separate funds. Your retirement funds should comprise the biggest portion of your savings. For example, if you save 20%, then your retirement savings may comprise 15%. The remaining money should be saved for other long-term and short-term goals, such as buying a house, buying a new car, and putting the kids through college. Additionally, everyone needs emergency savings. Ideally, you should have three to six months of income saved just in case of a major catastrophe, like prolonged unemployment.
There are countless ways to cut expenses and increase your savings. You might decide to get a side hustle in addition to your full-time job, for instance. You could also eliminate your cable bill and opt for a less expensive TV streaming service instead. If you have a spouse or partner, and one of you works from home, perhaps it would be possible to only keep one car on the road. Figure out what will work for you, given your lifestyle.
At GCS Credit Union, our members have access to a bundle of superior savings options, including money market accounts, share certificates, savings accounts, and Roth or traditional IRAs. Plus, members can use our online banking features in O’Fallon and beyond to take control of their finances. Join our credit union today by visiting a local branch or calling (618) 797-7993.