# How much money is considered an ideal savings account amount

1. Jan 1, 2016

I am 21, still living at home and attend college/work part time. I make above minimum wage and have around $2500 saved up. I am responsible for my car payment, food, gas and other necessities. Is that a decent amount for my age? 2. Jan 1, 2016 ### jtbell ### Staff: Mentor I think that was about how much I had when I graduated from college forty years ago, which would of course be a lot more in today's dollars, probably about$10000. Most of it was a gift from my parents for buying a new car sometime in the future; however, I didn't actually need a car until I finished graduate school so I kept the money until then.

A common recommendation is to have an "emergency fund" with enough money to cover essential living expenses if you lose your job, while you're looking for a new one. The amount would be (monthly essential expenses) x (estimated max. number of months needed to find a new job). If your parents are still at least partly supporting you, you can take into account how much they are willing to contribute and for how long. Maybe also take into account unemployment payments if you're eligible for them, although I'd prefer to think of those as an "extra cushion."

Then when you finish school, have a "real job" and are on your own, you can start thinking about also saving seriously for retirement. Work your way up to contributing at least 15% of your salary per month (including any employer match in a 401K plan or whatever). When you get raises, maintain that percentage or even boost it a bit (i.e. don't spend all of your raise!).

[I'm assuming you're in the US.]

3. Jan 1, 2016

### Borg

I couldn't agree more. Throughout the years, I have watched many people make the same mistake of not contributing to their 401Ks while they are young. You don't want to suddenly wake up one day in your forties with a couple of kids and no savings.

4. Jan 1, 2016

Staff Emeritus
You need to start from the other end - figure out what your financial priorities are and plan accordingly. I would imagine they would look like this:

6. Jan 2, 2016