Without emergency savings in place, an unexpected car repair, job loss or trip to the hospital could force you into debt and derail your goals.

How much should you save?

Aim to save 3 months’ worth of expenses when starting an emergency fund and build from there.

Most families should strive to have 6–9 months of expenses saved for an emergency.

Debt can get in the way of your savings efforts and make it challenging to reach your goals. Focus on paying down any high-interest debt you may have.

Credit cards, for instance, tend to have higher interest rates, meaning your interest payments might cost more than what you could earn from saving or investing your money. Paying this type of debt down can save you money in the long run.

21.37%

Average credit
card APR

Source: Federal Reserve, February, 2025

If you have an employer-sponsored retirement plan, such as a 401(k), be sure to contribute to it as early in your career as possible. If you don’t have access to an employer-sponsored plan, you might consider opening an individual retirement account (IRA). Both 401(k)s and IRAs offer certain potential tax benefits, and many employers will offer to match a percentage of your 401(k) contributions.

It pays to start early

Savings at age 67 if you contribute 6% of a $35,000 salary with a 50% employer match:

$0

$0

Start saving at 26

$0

$0

Start saving at 36

Assumes 5% rate of return, compounded annually at year-end. Assumes salary increase of 3% a year with inflation.

These goals fall roughly in a 1- to 5-year time frame. It’s helpful to set a specific savings goal so you know how much money you need, as well as when you need it. From there, figure out how much to set aside each month.

Short-term savings goals might be …

A down payment

A vacation

Your wedding

College degrees are more important than ever — Adults with a bachelor's degree earn an average of $2.8 million during their careers, $1.2 million more than the median for workers with a high school diploma. But college is also more expensive than ever, so saving for it is key.

Source: Georgetown University Center on Education and the Workforce, 2021. Latest data available.

Estimate how much your child’s college might cost and consider a tax-advantaged 529 college savings plan. There are loans for college but not for retirement. Contributions grow tax-deferred and withdrawals, including any earnings, are federally (and possibly state and/or local) income tax-free when used for qualified education expenses.

College savings plans aren’t limited to children or grandchildren. If you’re considering going back to school, you can open a 529 plan account for yourself, too.