Make saving a habit
Once you've gone through the budgeting process and understand where your money goes every month, it’s time to start thinking about saving for the future. People who learn to save money when they are young have a valuable headstart. But no matter where you are in life, it’s never too early or too late to start saving.

Why make saving a habit? Because at the end of the day, the amount you save is the most important factor in achieving your financial goals.

Save early and often
Making the decision to save is the first step. Now you have to consider three important things that can affect your success:

  • The amount you save
  • The time you have to save
  • Your rate of return

While you can strive for a certain rate of return, there are no guarantees. So it’s best to focus on the first two, where you have the most control.

How much is enough?
Whether you’re working toward a short-term goal or putting your efforts toward that all-important goal of saving for retirement, time plus the amount you save work hand in hand.

Here’s why: The sooner you start saving, the smaller percentage of your income you need to save. Conversely, the longer you wait, the larger amount of your salary you’re going to have to put away each year to reach your goal.

Start with 10 percent—and go up from there.
In general, saving 10 percent of your income is a good guideline for getting started, especially for young people. However, the later you begin to save, the more you should set aside. Learn more about and find out how you can meet your goal.

Don't waste a minute.
When it comes to saving, time is your greatest ally. It just makes sense: the earlier you start saving, the more time you have to make your savings grow.

Eight Savings Fundamentals
Where should you put your money first?

You may have several savings goals. Where should you start? Here’s a way to prioritize goals that can make saving seem more manageable.

We recommend that you start with the first four Savings Fundamentals and complete them in order. After you have a handle on the first four, move on to the last four and complete them according to your personal priorities.

1. Contribute to your company’s retirement plan up to the maximum employer match. Even if money is tight and you have multiple priorities, make it your first goal to contribute at least enough money to get all the matching funds your company offers.

2. Pay off nondeductible, high-interest-rate debt like credit cards. If you no longer have to pay 13% interest (or whatever high rate you owe on debt), you can keep that money for other things.

3. Create an emergency fund to cover at least three months of essential living expenses. This will help you keep from dipping into long-term investments or borrowing at unattractive rates when you need cash in a hurry. And remember, you may want to save even more in your emergency fund if you think you might be changing jobs within the next year or are anticipating any other significant life changes.

4. Contribute the maximum allowed to tax-advantaged retirement accounts. For example, if you’re saving only enough to capture the match in your company’s retirement plan, increase it to the maximum allowed. Or fund an IRA. The more you set aside, the more secure your may be.

5. Save for the down payment on a home. If you've mastered Savings Fundamentals one through four and your personal circumstances are right for buying a home, start saving for a down payment.

6. Pay down tax-deductible, high-interest-rate debt such as a mortgage. Reducing debt—even if it's a tax-deductible mortgage, home equity line of credit, or student loan—can enhance your ability to save.

7. Save for a child's education. To handle rising college costs, make the most of tax-advantaged college savings plans.

8. Keep investing. To stay ahead of inflation, your money needs to earn more than many traditional savings accounts pay. The first step to long-term investing success is to get going right away.

A private wealth advisor can help you learn more.