How Much Should You Save?

Saving is one of the wisest things you can do with your money. Whether for a rainy day or for a new bike, saving allows for financial flexibility. This demonstrates how important saving can be, but how much exactly should we save?

Long story short–as much as you can! The more you save, the more you will make in the long-run. This is based on the principle of compounding interest. As you let money sit in a savings account, it will grow based on interest accrued, and over time, this interest will grow exponentially from the original amount.

But, if you prefer a more structured way to save, you can utilize the 50-30-20 rule. While the rule is generally used for budgeting, it tells you to save 20% of your income based on spending 50% on needs and 30% on wants. But, this isn’t always the best to follow, as you may occasionally end up with more that you would like to save based on your income and expenses. 

Overall, try and save as much as you possibly can to set yourself up for a bright future!

Reach out to the Dollars to Scholars team if you have any questions!