How to Start Saving Today!


Financial Advice By: Carmen Wong Ulrich

Q: I just got hired at my new job about two months ago and I want to make sure I’m not only spending my money wisely but saving it wisely as well. I haven’t had a steady income for awhile though, so I’m not exactly sure how to create a budget that’s right for me. I want to make sure that I have enough money saved up in case I become unemployed again. Is there a standard percentage of my income that I should be tucking away? If so, how much? When should I start and where should I put my money?

Congratulations on the new job!  It’s great to have some steady income, but you’re right to start saving up money right away just in case you find yourself between jobs again.  Some folks talk about a ‘standard’ goal of saving 10% of your income, but that’s simply a goal.  The amount you should save depends on your living situation and if you have any other demands on your money such as high interest debt– which should get paid off ASAP!

What you can aim for first with an emergency fund is a total goal of saving up three to six months’ worth of living expenses.  If you’re a homeowner and support children, you can keep on truckin’ to even nine months or a year’s worth of savings.  Once you have that total number in hand, crunch your monthly expenses vs. your monthly income to see just how much you can put away to reach your savings goal as quickly as possible.  Let’s say you make $2,000 a month after taxes and your monthly expenses are $1,800 a month.  For three months worth of living expenses, your goal would be to have $5,400 in emergency savings.  If you can take $200 each month and put it toward that goal, you’ll be all set in a little over two years.

Don’t get discouraged by the long time it may take you to save what you need!  Dedication is key.  To help, set up an automated savings deposit so that $200 is taken out right away from your paycheck deposit each month so you’re not tempted to spend it.  And don’t worry about wanting to earn any money on these savings by investing it, for example.  You need to protect this money so it can protect you.   That means looking for an interest-bearing savings account or money market account where you can at least earn a little interest (say 1%) but not risk money at all.  Shop around for free for these accounts at or if you can use a credit union at  Happy savings!

Carmen Wong Ulrich is the co-Founder and former President of ALTA Wealth Management and a Professor in NYU PolyTech‘s school of Finance and Risk Engineering. She is an author and the former host and co-creator of CNBC‘s “On the Money,” and currently the money advice columnist for Good Housekeeping, a contributor to MSNBC and CNN as well as a frequent expert guest on ABC’s “The View.

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