How Much Should I Save?

August 18, 2011 at 3:40 am | Posted in Uncategorized | Leave a comment

To answer this question, you should first answer “How much do you want to spend each year when you are retired?” There is no “rule of thumb” to follow; financial experts suggest saving between 10-20% of your income. However, it isn’t always easy to start saving. Take care of your monthly living expenses, credit card debt (reduce high monthly interest charges), and put 3-6 months living expenses in a fund for emergencies before taking chunks of money out of your paycheck. Once you start saving, here are some common sense tips:

  • The earlier you start saving, the longer your money will have time to grow
  • Live within or below your means
  • When you receive extra money (e.g. bonuses, gifts), put it in your savings right away before you can spend it

Take some time, sit down, and do the math. Make your goal and then determine the steps you need to take to reach that goal. Here are some financial calculators at my website to help you: http://darrensmithcpa.com/fintools.php?category_id=6

Start saving!

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