I am somewhat of the go-to financial resource for many friends and family members because they know I’m knowledgeable on the subject and I read a lot of books on it. I’m curious though, I know most of the ‘experts’ recommend saving 15-20% depending on circumstances. But what do you guys typically recommend? Personally, I think there’s a huge mistake in the personal finance community by leaving out cash savings. My general advice is typically to recommend automatically investing 15-20% for retirement depending on what you can afford and automatically saving another 10-15% in savings, usually in a HYSA for things like down payment, E-fund, car, healthcare, big purchases, etc.
For renters, I would honestly recommend 8-12 months of rent saved. Which I know is pretty undoable for a lot of people, but I got laid off 4 months ago. If I didn’t have enough to pay off my rent, I would be panicking.
@Miller
Ya agreed. I’m on team ‘you need to have a 9-12 month emergency fund’. 3 months is not an option. 6 is for people with a stable job, no dependents.
I think it depends on your situation and goals. Once you have a fully funded emergency fund, it can make more sense to pay down debts or invest rather than save 15% in cash that doesn’t have a specific purpose. But I agree that 10-15% is a good amount to save in cash if you don’t already have sufficient cash for your needs/goals.
I think it depends on the situation. My husband and I each contribute up to the max company match into 401k. We also max out the Roth IRA’s. We currently need a new 30k roof, so we have savings going to that. But we also just bought this house last year at an entirely too high rate, so we are eager to pay down that debt. Planning to refi in the spring if the rates drop again, and hoping by then, we are paid down enough to drop PMI. So our savings rate is essentially ‘as much as we can%,’ lol.
@River
How much do you make a year where you can afford to put away 30k just in retirement? And what do you do for a living?
Oli said:
@River
How much do you make a year where you can afford to put away 30k just in retirement? And what do you do for a living?
Lol, I wish I had 30k to go into retirement. I said max company match. That’s only 6% for me and 10% for my husband. 
Depends on your situation. This is my generic advice:
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You should save 1 month E-fund, or at least $2467.
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If your employer offers a retirement match, you should at least invest enough to get that match.
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Pay off high-interest debt (10%+) via snowball or avalanche.
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Then fully fund your E-fund up to 3-12 months in a high-interest account. 3-12 months depends on your situation, dependants, job security, etc.
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Once the E-fund is funded, top up your retirement to 15% of your gross pay (including the employer match) in a tax-sheltered account.
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Pay off low-interest debt (<10%) besides your mortgage.
All while saving for any known purchases so they don’t become debt. But I don’t see the point in saving just to save. Save for a purpose.
@Oak
I like how you laid that out. My stance on saving at least 10% cash a month is for things beyond the obvious: down payment, emergency fund, car, etc. Beyond that, there will always be other things that come up: home repair, big discretionary purchases, travel, medical expenses, etc. Maybe it could get down to 5%, but you should always be stacking some cash on the side so you don’t get derailed by these expenses as they come up.
Why $2467? Seems like a random number.
Ira said:
Why $2467? Seems like a random number.
Haha, it’s what a podcast I listen to recommends. Apparently, the average person wouldn’t be able to take on a $2467 expense without taking on debt. The number just stuck in my head.