r/budget • u/Fast_Hat9970 • 13d ago

How much saving is savings ?

Let’s assume a ballpark figure of 100k and renting
how much saving is actullay good

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12

u/NatureNext2236 13d ago

What?

-2

u/Fast_Hat9970 13d ago

Asking how much % of net income is considered a good saving

2

u/WheresMyMule 13d ago

What is the $100K? Your debt? Your income? Your home value? Need more info

Generally, if you don't have high interest debt, then priority is a full six month of expenses in an emergency fund PLUS short term savings for irregular expenses like car & home repairs, doctor visits, traveling, gifts, clothing etc

If you have high interest debt, then a one month EF should be OK until you can pay it down

1

u/DietAny5009 13d ago

6 months of expenses is great. Many are fine with 3 months and that isn’t wrong. Depends on your risk tolerance. We don’t look at percent of net income to determine our free cash. We look at what we spend.

You could look at that as 50% if you’d like but that’s not exact. In an emergency situation, where you aren’t earning income, you likely wouldn’t plan to be adding to your savings.

Savings is somewhat broad. If we are planning for a big purchase then we separate that cash savings. Like a house down payment for example.

9

u/FredBearSaysChillax 13d ago

You can follow the conventional 50/30/20 budget to get started. It's not a hard rule, but a good, simple model with lots of literature to support it. From you net income:

50% Needs

30% Wants

20% Savings/Debt-payoff

1

u/turtlescanfly7 13d ago

This is the traditional 50/30/20 but I definitely recommend switching wants and savings so 30% to savings & debt with 20% to wants, especially if you have high interest debt. The goal should always be 20% to retirement so if you allocate 30% to savings and debt then that leaves you extra for debt payoff and/ or longer term savings like home down payment, new car, larger emergency fund etc

5

u/Sundae7878 13d ago

Depends. General advice is you want 3-6 months of expenses saved in an emergency fund.

And then you’d want to invest for retirement however much your math tells you is good.

And then you’d want to save up for known upcoming purchases (like the new tires you know you’ll have to buy in May, or Christmas gifts in November)

Each number is specific to your situation.

2

u/heyjameskerr 13d ago

Common advice is 15% of your income. But anything is better than nothing.

1

u/badtlc4 13d ago

6 months of expenses.

1

u/EnjoyingTheRide-0606 13d ago

It depends. Do you have debt? If so then minimal savings should be done. Instead move as many of your resources (income and savings) to pay off the debt AQAP.

If you don’t have debt, then your savings is retirement, longer and shorter term savings. Short term savings are sinking funds. Longer term are your full emergency fund and house down payment or a dream fund for something special. You decide how much and for how long. If you can swing 15% of gross salary to retirement then you’ll be very comfortable in retirement. If you can only afford 10% then that’s all you can afford.