Skip to main content
It looks like you're using Internet Explorer 11 or older. This website works best with modern browsers such as the latest versions of Chrome, Firefox, Safari, and Edge. If you continue with this browser, you may see unexpected results.

Personal Finance: Saving

How much is enough?

A common question when people begin to save is how much is enough? But there is no way to answer this question for all people/situations. Depending on what you are saving for and many other factors can affect how and how much you can save. There are several general rules that you may have heard that you might want to keep in mind:

  • Always have at least 3 months (6 - 12 is better) of living expenses in emergency savings.
  • Save 10% - 15% of your salary for retirement.
  • Your final retirement accounts should be 40 times your highest annual salary.

There are many others, but the problem with these general rules is that:

  • they don't work in all situations
  • they can be discouraging if they feel too hard to acheive
  • every life situation is different

Before beginning any savings effort it is usually best to create a personal/family budget.

What is your savings goal?

The goal you are saving for can impact the way to save as well as some of the stratigies you use. Saving for college is different than saving to buy a house. Things to keep in mind are:

  • The length of time until you need the money
  • The purpose for the savings
  • The amount of risk you are willing to take with the money

For example if your are saving for emergencies you don't want to take any risk, and could need the money at any time. The best way to save would be a traditional savings account with a bank. If on the other hand you were saving for a childs college and you had many years you might want to consider a 529 plan.

Expense Ratios

Expense ratios are the fees you pay on an annual basis to the company managing your investments. These can add up, and cost you in the long run, so understanding them and what is considered high or low can be beneficial. Check out these websites and video's to get a better understanding of this key term in savings and investment.

Books on Saving

Contact Us

4000 Dupont Circle
Louisville, KY 40207
Ph: (502) 447-1000
Ph: (800) 264-1799

2222 Wendell Ave.
Louisville, KY 40205
Ph: (502) 456-6773
Text: 502-200-1864

2355 Harrodsburg Road
Lexington, KY 40504
Ph: (859) 514-3359