Saving is an important part of financial security because it helps you to build up funds to cover your goals and the surprises life throws at you. It also helps you afford the life you want tomorrow. Those are all important things, but of course you can’t save all your money … so how much should you save?

Check out the slides below to find out!

As you saw in the slides above, the general rule of thumb is to allocate 20 percent of your gross income to saving and investing. But, of course, the amount you should be saving depends on what you want for the future. Think about your goals. Write them down – and be specific.  

Why is it important to be specific?

Let’s say that one of your goals is to buy a home. If that’s all you’ve decided, you know you need to save for a down payment, but you don’t know how much or how long you have to save for it.

But if you think about whether you want a house or a condo; where you want to be located; how many bedrooms you need; what other amenities are important to you; and whether you want to buy in one, five or ten years, you can get a good idea of how much your dream home might cost and how quickly you need to save that money.  

It’s the same with any of your goals. The more detail you can picture that goal with, the better chance you have of reaching it.

Quick Discussion Question

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