2007-12-23 01:58:12 · 7 answers · asked by Interested to a point 2 in Business & Finance ➔ Personal Finance
The old rule of thumb was 10%- but that is seemingly just not enough anymore.
The rule of thumb nowadays is to first and foremost, max out the match on your 401K. If you don't, you are just throwing free money away for your future. This is usually 3-7% but the ideal would be 15% consistently throughout your life. This will ensure a secure and comfortable retirement.
The second rule of thumb is to have at least 6-8 months living expenses saved in an emergency money market fund earning at least an APY of 5%.
The third rule of thumb is to save 10% for things like a house or vacation or whatever, also in a Money market fund.
The fourth rule of thumb is to have a college fund for your infant children started as well on a pre-tax basis.
All in all, after you have your 6-8 months' emergency funds set aside, in a perfect world, approximately 25%-30% of your pay should be saved.
There is a book called the "Automatic Millionaire" by David Bach- I use this as my motivational tool and guidebook for savings and have read it over and over again. I HIGHLY recommend you spend the $8 on this book for yourself for Christmas and jump start your savings for the New Year. It is by far the smartest book I have read to date and because of it, went from saving almost nothing a year to over $30K per year.
Good luck!
2007-12-23 02:45:33 · answer #1 · answered by Solange 4 · 1⤊ 0⤋
If you are in debt, I would use the money to pay off that first. Don't have any balances left on your credit cards, etc.
Most financial experts agree that 30% is a good number, if you can manage it.
If you are lucky enough to still be in school and living at home with a part-time job like me, I would recommend saving as much as you can. I save probably 80% of what I make every year since I have no rent to pay and no real expenses, I save around $10,000 a year this way even though I'm only making minimum wage. Obviously you need to spend some money to have fun sometimes, but you can get by without spending very much at all.
2007-12-23 02:13:54 · answer #2 · answered by Anonymous · 1⤊ 0⤋
This Site Might Help You.
RE:
How much money should I save from each pay check? Is there a recommended percentage?
2015-08-07 08:48:42 · answer #3 · answered by Anonymous · 0⤊ 0⤋
Save as much as you can. But if is possible, I would say save at least 15% to 30% from each pay check.
2007-12-23 04:32:14 · answer #4 · answered by Anonymous · 1⤊ 0⤋
it depends... if you have a company that matches money you put into a 401K then you should try to put as much as they match (usualy about 3-5% of a paycheck). If you are just putting money into a savings account then just take out whatever you know you won't need to spend on bills and such. Every person is in a different situation so it is hard to just say a certain percentage to save.
2007-12-23 02:05:47 · answer #5 · answered by czwtrpolo2 2 · 1⤊ 0⤋
Suze Orman says you should have 6 or 8 months of living expenses saved in case you lose your job or for other emergencies.
2007-12-23 02:26:35 · answer #6 · answered by njyogibear 7 · 1⤊ 0⤋
The modern rule is 10%. In Japan, they put away 25%. My rule? As much as possible, even if it means you have to live off instant noodles that pay period.
2007-12-23 05:54:55 · answer #7 · answered by Legend 4 · 2⤊ 0⤋