Building Good Money Habits

Start Saving Twenty Percent Of Income

Saving twenty percent of your income is one of the most important financial decisions you’ll make. This money is meant to go into your retirement accounts, savings accounts, and emergency fund. If you feel you cannot save this much, the best thing you can do is go over your finances. What can you pay off, stop buying, and minimize? Start by making a budget, minimizing any bills possible by asking for a lower interest rate or lowering the limits on your plan.

If you find you don’t have twenty percent of your income to save, start by saving as much as possible while you work on either earning more or paying off more debts. The first account you should fund with savings is your emergency fund. This fund pays for unexpected situations in life without worrying you don’t have the funds. The second account is your retirement. Allow at least ten to fifteen percent of savings to go to your retirement accounts. The remaining percentage should go into a general savings account for whatever you’re looking to save for. A house, a car, a vacation, or even enough to take a year off after you have a baby are just a few of the common items people save for.

Continue reading to learn about tracking progress.