{"id":11149,"date":"2026-01-23T00:29:00","date_gmt":"2026-01-23T06:29:00","guid":{"rendered":"https:\/\/www.discover.com\/online-banking\/banking-topics\/?p=11149"},"modified":"2026-02-06T14:18:54","modified_gmt":"2026-02-06T20:18:54","slug":"how-much-should-i-have-in-savings","status":"publish","type":"post","link":"https:\/\/www.discover.com\/online-banking\/banking-topics\/how-much-should-i-have-in-savings\/","title":{"rendered":"How much should I have in savings? Tips from financial planning experts"},"content":{"rendered":"\n

Saving is key to your long-term financial success\u2014there\u2019s no doubt about that. But since everyone is on their own financial journey, there\u2019s no one-size-fits-all answer to the question: How much should I have in savings?<\/p>\n\n\n\n

\u201cYou want to think about your various savings goals, how they fit together and how they enable the life you want,\u201d says Jim Wang, founder of a personal finance blog.<\/p>\n\n\n\n

By considering your lifestyle and goals, you can determine how much to keep in various savings categories, each serving an important purpose. From there, you can calculate how much you should save each month.<\/p>\n\n\n\n

Ready to get into it? Let\u2019s start by looking at the three key savings buckets.<\/p>\n\n\n\n

Explore the 3 essential savings categories<\/h2>\n\n\n\n

When we talk about \u201csavings,\u201d we\u2019re referring to three basic categories: emergency savings, targeted savings, and retirement savings. Wang suggests breaking down your savings into these three buckets because they have different purposes and timelines for use:<\/p>\n\n\n\n

1. Emergency savings: A rainy day fund<\/h3>\n\n\n\n

An emergency fund covers unexpected expenses that you wouldn\u2019t be able to pay for with your regular income\u2014things like an emergency room visit, car repairs, or a replacement dishwasher. It\u2019s also there to cover bills and regular expenses if you lose your job or experience a pay cut. How much money should you keep in savings for these unplanned scenarios?<\/p>\n\n\n\n

David Weliver, founder of a financial blog, recommends starting with the equivalent of one paycheck. With this chunk of cash, you reduce the likelihood that you\u2019ll need to rely on credit cards or other debt to cover an emergency, Weliver adds.<\/p>\n\n\n\n

\"A<\/figure>\n\n\n\n

<\/p>\n\n\n\n

Don\u2019t be intimidated if you don\u2019t have this rainy day bucket yet. Follow these tips to start an emergency fund<\/a> from zero. Once you get going, you\u2019ll want to set your sights higher than saving one paycheck.<\/p>\n\n\n\n

\u201cFinancial experts say to save three to six months of expenses for emergencies or 10% of your income long term,\u201d Wang says, \u201cbut you may want to save more if you work in a riskier field or are the sole earner in your household.\u201d<\/p>\n\n\n\n

Wondering where to keep your emergency fund<\/a>? Consider a high interest rate savings account, money market account or a certificate of deposit. The idea is that you want your money to be easily accessible when you need it. You also want it to earn interest so your savings can grow over time.<\/p>\n\n\n\n

2. Targeted savings: Big-ticket expenses<\/h3>\n\n\n\n

The second bucket is targeted savings. These are planned expenses that exceed your regular budget. Think: buying an expensive couch, planning a vacation without going into debt<\/a>, paying for a wedding or buying a home.<\/p>\n\n\n\n

You\u2019re probably wondering: How much should I have in savings for these big-ticket expenses? There\u2019s no set amount for this kind of savings, as it\u2019s purely discretional. However you approach it, the important thing is to diligently save for these purchases so you don\u2019t feel tempted to use credit or blow your budget on them, Weliver says.<\/p>\n\n\n\n

To determine how much you should have in savings for big purchases, start by considering the major milestones you hope to achieve. If you\u2019re a young professional and marriage and buying a home are on your radar, for example, you\u2019d want targeted savings for a wedding and a down payment.<\/p>\n\n\n\n

Once you\u2019ve determined what you need targeted savings for, you can get started. You may want to use multiple savings accounts<\/a>\u2014one for each goal\u2014to easily track your savings progress.<\/p>\n\n\n\n

For longer-term goals, you may consider investing the funds in the market. To determine if that\u2019s right for you, consider when you\u2019ll need to use the savings. \u201cMoney I need within five years won\u2019t<\/em> be in the stock market; money I won\u2019t need for 20-plus years could<\/em> be invested in the market,\u201d Wang says.<\/p>\n\n\n\n

Lastly, you may want to break your targeted savings goal down by how much you should save each month. For example, if you need $15,000 for the down payment on a home in five years, you know you need to save $3,000 each year. That breaks down to $250 a month. That smaller figure can feel more attainable\u2014and just like that, you\u2019re on your way!<\/p>\n\n\n\n

3. Retirement: A major milestone<\/h3>\n\n\n\n

The third bucket is retirement. These funds are typically saved in 401(k)s, IRAs, and other tax-advantaged accounts that allow you to invest your money.<\/p>\n\n\n\n

How much should I have in savings for retirement, you ask? It\u2019s important to realize that preparing for retirement requires different strategies than your emergency and targeted savings.<\/p>\n\n\n\n

You\u2019ll want to work with a financial advisor to determine a personalized strategy and to make a retirement budget<\/a>. \u201cEveryone should think about what they\u2019ll need in retirement and work backwards to get a sense of what they\u2019ll need to save each month to make that happen,\u201d Weliver says.<\/p>\n\n\n\n

Retirement savings calculators can help guide you toward how much you should have in savings based on your salary, current savings, when you want to retire and your ideal retirement lifestyle.<\/p>\n\n\n\n

There are also general rules of thumb for how much you should have in savings for your retirement, Wang adds. According to one benchmark, by age 30 you should have about one year of your current salary saved for retirement, Wang notes. By age 40, you should have three times your annual salary saved, and five times by the age of 50, he says.<\/p>\n\n\n\n

Take a proactive approach to saving<\/h2>\n\n\n\n

Remember, all three savings categories are important. To accomplish your goals, you\u2019ll want to transfer funds directly to your online savings account, 401(k), or other savings vehicles before you can spend the money on something else.<\/p>\n\n\n\n

\u201cGive your income a purpose as soon as it hits your account, or you\u2019ll probably find a way to spend it on something unnecessary,\u201d says Chonce Maddox, founder of a financial blog.<\/p>\n\n\n\n

Now that you\u2019ve considered the big three savings categories, it\u2019s time to determine how much you should save each month.<\/p>\n\n\n\n

How much should I save each month<\/strong>?<\/h2>\n\n\n\n

While there are different perspectives on how much you should save each month, the experts are fairly consistent about dedicating roughly 20% of your after-tax income to savings.<\/p>\n\n\n<\/div>\n\n\n

\n
<\/div>\n
\n

“If you want to save 20% of your income but are having trouble, start by saving 4% or 5% and increase as you go.\u201d<\/p>\n