When it comes to savings, I have a good amount of extra money to spend. I will be saving into four categories: emergency, retirement, vacation, and investments. Emergency savings are the most important, with retirement as a close second.
| Savings Category | Amount Saved Each Month |
|---|---|
| Emergency | $1,082.25 |
| Retirement | $946.20 |
| Vacation | $50.00 |
| Investments | $310.17 |
Total Savings: $2388.62
Good financial planners will suggest having at least 3-6 months of your monthly income saved for emergencies, the main one being losing your job. These savings allow you to keep your current lifestyle and give you a cushion so you don't need to worry as much while looking for another job. If I'm saving $1,082.25 each month for emergencies, I will be able to get to $16,935 (3 months pay) in about 15-16 months. After my fund is full, I will be able to start putting that monthly $1,082.25 into other parts of my budget, such as investments or personal projects.