General Savings Tips

Saving is important to the economic progress of a country because of its relation to investment. If there is to be an increase in productive wealth, some individuals must be willing to abstain from consuming their entire income.

First and foremost, saving money is important because it helps protect you in the event of a financial emergency. Additionally, saving money can help you pay for large purchases, avoid debt, reduce your financial stress, leave a financial legacy, and provide you with a greater sense of financial freedom.

• An emergency fund is a must.
• Establish your budget.
• Budget with cash and envelopes.
• Don’t just save money, save for your future.
• Save automatically.
• ‘Start Small.
• Start saving for your retirement as early as possible.
• Take full advantage of employer matches to your retirement plan.

A general rule of thumb says it’s safe to stop saving and start spending once you are debt-free, and your retirement income from Social Security, pension, retirement accounts, etc. can cover your expenses and inflation. Of course, this approach only works if you don’t go overboard with your spending.

As much flack as millennials get for their bad financial habits, they actually are pretty good savers. A recent survey conducted by Bank of America found that 73% of millennials are actively saving money and more than half (59%) have $15,000 or more in savings.

According to a SmartAsset study, millennials aged 16 to 34 make around $35,000 on average, which is 20% lower than baby boomers made at the same age when adjusted for inflation. This makes trying to save for retirement that much more difficult and helps explain the low millennial savings rate.

According to the study, millennials are more likely to expect to be doing some form of work in retirement. The median retirement savings for millennials today is $23,000, compared to $144,000 for baby boomers and $64,000 for Gen Xers, according to the study.

According to a recent T. Rowe Price survey, 43 percent of millennials expect to retire before the age of 65, while a Bankrate survey found that millennials cited age 61 as the ideal age to bid adieu to their careers. 43 percent of millennials expect to retire before the age of 65.

According to a survey by Bank of America BAC -0.3% , a surprising 16% of millennials between the ages of 23 and 37 now have at least $100,000 saved for retirement.

while still enjoying your life right now. Saving 30-40% still represents a significant chunk of your gross income. Getting to 30-40 percent of income saved usually allows people to get to a point where work becomes optional by their 50s or 60s, depending on their lifestyle and expenses they want to maintain.

By 40, Fidelity recommends having three times your salary put away. If you earn $50,000 a year, you should aim to have $150,000 in retirement savings by the time you are 40. If your annual salary is $100,000 a year, you should aim to have $300,000 saved.