How Much Should I Be Saving

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This is an evergreen question that a CERTIFIED FINANCIAL PLANNER™, like myself, is asked frequently. It can seem like a simple question with a straight forward answer. However, the process of getting to that answer can be anything but simple. Most of us are juggling multiple life and savings goals and retirement savings is an important part of the mix. Here are some of the ways I approach this question with clients.

What do you want to accomplish?

If you’re in your late 30s and you are saving to buy a home in the next few years the amount you need to be saving and the way that money is invested is going to be much different than the money you’re putting aside for retirement in 30 or so years.

Let’s say you are in your 20s and make a good salary. My initial answer might be, “as much as possible.” One rule of thumb is retirement savings equal to 20% of gross income. However, you may be balancing multiple goals. It’s important to save for near and mid term goals as well. Create an amount that can be automatically saved each paycheck. Often times tracking spending can help you define these figures.

Personalized Answer

The answer to this question is going to be different for everyone. I have to gain a better understanding of my clients overall situation. What are they saving for? Perhaps a new car, retirement or both? Age, spending levels, the amount they’ve already have saved all factor in. Also, what is their willingness to sacrifice to save for a particular goal? I have to consider my clients’ motivation. Usually, we come up with a savings range and make adjustments along the way.

Related Strategies

We start with saving and then need to augment our savings, with additional strategies,  to be most effective. I assess the accounts that are best suited for particular goals. Also the types of investments that are appropriate. We need to consider an emergency fund, a debt payment plan and retirement fund offerings as well as investment decisions.

So, “how much your you be saving?” Consider what you want to accomplish, personalize your answer and create strategies, in order to SaveUp!

This post was written by SaveUp’s personal finance contributing writer, Catherine Hawley, CFP®.

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Written by Catherine Hawley

Catherine is a CERTIFIED FINANCIAL PLANNER (TM) who offers accessible and objective financial advice to individuals and families. Her aim is to help clients gain clarity and confidence so they can pursue their definition of financial success. You can find more information about her independent practice at She has worked at Rhodes & Fletcher, LLC as a Personal Benefits Specialist and at the firms of Bernstein Global Wealth Management and Barclayʼs Global Investors. Catherine has a bachelors degree in communication studies from the University of California, Los Angeles where she was a scholarship athlete and captain of the womenʼs tennis team.