How Much of Your Paycheck Should You Save?

Saving money can be difficult, especially if you feel like you’re just barely making ends meet. But putting some money from each paycheck aside for future expenses can be an important part of a well-rounded financial plan.

Many experts suggest putting 20% of your paycheck toward your total savings, which includes retirement, short-term savings, and any other savings goals.

What Percentage of My Paycheck Should I Save?

Some experts suggest saving as little as 10% of each paycheck, while others might suggest 30% or more.

Potential Savings Goals to Work Toward

An Emergency Fund

Ideally, an emergency fund will contain enough money to cover your living expenses for three to six months, but how much you’ll want to put aside will depend on your situation.

Paying Off High-Interest Debt

One debt payoff strategy you may want to consider is the debt snowball method. With this approach, you start by paying off the debt with the smallest balance and put all your extra payments towards that until it’s paid off 

Saving for Retirement

If your company offers a 401(k) with matching contributions, it can make sense to put aside at least as much of your paycheck as your company will match (since this is essentially free money).

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