Do You Have Enough in Savings?


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What does your emergency fund look like?

Experts recommend that you have 6-9 months worth of expenses saved. This is known as the “emergency fund” and acts as a safety net for life’s unexpected events – the worst being job loss. Most people should aim for 8 months of expenses saved since that’s how long it takes for the average person to find a new job.

How much should I be saving every month?

About 20% of your monthly income should be going to savings every single month. That means if you make $3,000 a month after taxes, you should be putting $600 a month into savings (including retirement). Keep in mind, 20% is a minimum. Saving more than 20% is always good too!

Step #1

If your savings account is looking a little bare, it can be overwhelming when thinking about saving that much money. They key is to start small and go from there. Saving two weeks worth of pay should be your first goal. Really buckle down to make this happen! Create a budget and stick to it. Knowing where all of you money is going will allow you to have an awareness that you might not have had before. Once you have reached that savings goal, you can work on increasing your next goal.

Step #2

Your next benchmark should be to have 3 months worth of cash stashed. You should be getting used to putting money in savings by now, and spending less will start to be more comfortable. Until you have 3 months saved, make the emergency fund a priority over saving for anything else, including retirement. After that point, you can start allocating some of your monthly savings towards retirement.

Step #3

Keep saving! Now that you have 3 months worth of cash in savings, you should start putting some towards retirement. Experts recommend putting 15% of your income towards retirement. You’re end goal for the emergency fund is to have 6-9 months saved. If you need to lower your retirement contribution during this time, just remember to pick it back up once you reach the 6-9 month savings benchmark. It will take some time, but once you achieve this third step, you should look at putting your money elsewhere instead of piling more cash into savings. Increase your retirement contribution to at least 15% and put money towards other investments.


If you need $3,000 a month to get your bills paid and have food, you should aim to have $18,000 – $27,000 in savings. This isn’t something that will happen overnight, but it is achievable with small lifestyle changes and good money habits over time.

Read about my favorite budgeting tool here! Knowing where your money is going and budgeting is your most powerful tool when trying to save!

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