How much you should be saving from your income varies from person to person. The biggest factor in saving money is determined by what your personal goals are for the future. From short-term and long-term goals, saving money is always a smart decision that prepares you for the future. There are some easy ways to begin to understand how much you are spending and how much you should be saving.


The Rule of Thumb

The first step would be to look at your own personal and financial expectations and plan around those goals. Are you looking to be able to afford to pay expense within the next year, next 10 years or next 20+ years? This can gauge where and how you intend on saving money. Also, analyze how your savings looks currently and if you feel you need to make adjustments.

The Teachers Insurance and Annuity Association of America state that the general rule of thumb is to save 20% of every paycheck you receive. This is then broken down to 15% of that to be put towards your retirement and the other 5% should be put into your savings for emergencies. The majority of the money you put back should not be thought about and should be done almost as a reflex. 50/30/20 is the golden rule when dividing your finances into different facets. Necessities should be about 50% of your income, disposable income should be 30%, and the remaining 20% goes towards your savings.


Now or Never

The best time to start saving money is now. Even the most simple and inexpensive ways can be a step in the right direction of eliminating costly expenses. Eating out for dinner and smoking cigarettes are easy ways to drain your income slowly. To increase your saving, start avoiding indulgences that are expensive.



Saving money can protect you when unexpected situations may arise during your lifetime. Accidents and emergencies are inevitable so it is always ideal to prepare for when they happen. Other expensive situations that may arise in your lifetime may be weddings, home repairs, holidays, travel, college savings, and even raising a family.