When it comes to setting aside money for necessities, splurges and big expenditures, consider circumstances before age. Note that your circumstances are likely to change throughout the decades, however.
“To figure out how much you need, use an online budgeting resource such as Mint, break out your monthly bills and figure out an overall amount,” said David Bakke, an author with the personal finance website Money Crashers. “If you’re falling short, try using coupons for groceries, or go without cable TV, as there are plenty of alternatives.”
As for other expenditures, it’s important to budget and save for those, as well. “To me, splurges and big expenditures should be saved for on a case-by-case basis, and there’s really no one amount that can be determined according to one’s age,” said Bakke. “In order to avoid falling into credit card debt, only put a splurge on a credit card if you can pay the bill off in full by the time it comes in.”
Whether you’re focused on saving for retirement, emergencies or splurges, it’s helpful to have a framework so you can cover your financial bases.