How Much Should I Be Saving?
One of the most common questions we hear as a financial planner in Gaithersburg, Maryland is: ‘how much money should I be saving?’. That answer really depends on your income level, age, and goals. There is no exact number to follow, but in this article we will explore some of the things we encourage our clients at CIC Wealth to consider.
How much should I be saving?
A lot of variables impact exactly how much you should be each month. When you work with an advisor at CIC Wealth, we will provide custom solutions based on your priorities. A financial planner in Gaithersburg, MD will explain that these are some of the factors that can impact how much you should be saving:
- Your age
- Your income
- How much debt you have
- How much you have available in an emergency fund
- How much you have already saved for retirement
As a general rule, saving ten percent of your income is a good start. If you think that’s too high for you though, don’t be discouraged. Whatever you can afford to put aside each month is still valuable, and over time you can slowly increase what you’re able to save.
If you can save up to 20% each month, then you might be candidate for the 50/30/20 rule. This means your budget would like like this:
- 50% for necessities
- 30% for discretionary items (wants)
- 20% for savings
It may not be realistic for the 20% savings to go straight to investments. The savings may go to conservative retirement accounts or to an emergency fund. By working with a financial planner Gaithersburg, MD trusts, you can ensure you are getting the best advice on how to manage your wealth.
What does a financial plan include?
Overall, a financial plan is designed to help you achieve your goals and in the long term, worry less about money.
When you meet with an advisor at CIC Wealth, we will review all aspects of your life and future goals. Our advisors are committed to building relationships with clients. Only by taking a holistic approach to planning can we assist you to create the most secure future for you and your family.
Some of the things we will examine include:
- Your goals and objectives
- Cash flow
- Retirement accounts
- Investments
- Net worth
- Tax planning and insurance needs
How often do I have to update my financial plan?
Your Gaithersburg, MD financial planner will work with you to identify how often your plan needs updating. In general, you’ll want to examine your financial plan during any major life event:
- Marriage
- Divorce
- Birth
- Death
- Home purchase
- Retirement
- Graduation, etc
The advisors at CIC Wealth understand that consistent communication with clients is the only way we can provide top notch service and results. Your CIC Wealth advisor will routinely check in to understand what life events you have just encountered. At bare minimum, an annual review of your financial plan is strongly advised.
If you’re looking for a Gaithersburg, MD financial planner don’t hesitate to contact CIC Wealth.