When it comes to saving money, we all know we should be doing it – but it can be tough to sort out the details. If you’re a little confused by the numbers, you aren’t alone. A 2016 study showed that a full third of Americans had $0 saved. That’s a huge problem.
Of the remaining people polled who did manage to save some money, half of them had fewer than $1,000 put aside. Obviously, $1,000 is not enough – but what is “enough”?
There are few different viewpoints on what constitutes enough, but everyone agrees on one thing: You need an emergency savings account. Read on to see what else you should have saved and by what age.
Late-teens – early-twenties
$500-$1,000. This money is for emergencies only – think car repairs and surprise medical bills, not weekend trips and really nice boots.
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This makes it easy for you to transfer money over when you’re still in the stashing stage and easy to access when you’ve got a financial emergency on your hands. If you really want to be ahead of the game, put this money into a liquid investment vehicle or a money market account.
Twenties
½ your salary. For the average American working full time, this means you’ll need to have about $15,000 saved. That sounds like a lot, but look at it this way: If you give yourself 10 years to save, you are putting aside just about $30 per week. By adopting habits like budgeting, living below your means, and always taking that 401k match, you’ll get yourself there in no time.
This money should be kept in a mix of pre- and post-tax retirement accounts, like your company sponsored 401k and your own personal
They are getting money from their parents and do not have any savings plan put into place.
Paul Bannister, bankrate.com. Initially when people receive a credit card they state that it is for “emergency purposes only”. However, that does not seem to be the case. For some, keeping up with the Joneses is an emergency. Heaven forbid, a sale at the GAP.
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