There is no single right answer for everyone, but there are well-tested guidelines that can help you set a savings target.
A common benchmark: about 20%. Many financial frameworks — including the 50/30/20 rule — suggest aiming to save roughly 20% of your after-tax income. That figure includes retirement contributions, your emergency fund, and saving toward other goals.
If 20% is not realistic right now, start where you can. Saving something is far better than saving nothing. Even a small percentage builds the habit — and you can increase it over time, such as raising it by 1% every few months or each time you get a raise.
A useful order of priorities for your savings:
- Build a starter emergency fund — see how much to keep in an emergency fund.
- Capture any employer retirement match — contributing enough to get a full 401(k) match is an immediate return.
- Pay down high-interest debt, which can cost more than savings earn.
- Keep building retirement savings and other goals.
Make it effortless: "pay yourself first" by setting up automatic transfers on payday, so saving happens before you have a chance to spend the money.