What Percent of Income Should I Save Monthly?

Determining the ideal savings rate involves aligning personal financial goals with practical tools. Fidelity Investments suggests that understanding compound interest is crucial; this principle illustrates how earnings generate further earnings, significantly boosting long-term savings. A common question is, what percent of one's income is sufficient to ensure a comfortable retirement, and the answer often varies based on individual circumstances. Many individuals find it helpful to consult resources like the U.S. Bureau of Labor Statistics (BLS) to understand average income and expense patterns, which can inform savings targets. Effective budgeting, often facilitated by apps such as Mint, plays a vital role in tracking income and expenses, thus clarifying how much can realistically be saved each month.

Charting Your Course to Financial Success

Saving isn't just about setting aside money; it's about strategically planning for your future. It's the bedrock upon which financial well-being is built, the key to unlocking a more secure and comfortable life. Think of it as charting a course: you need to know where you are going and how you plan to get there.

Strategic saving transforms abstract dreams into tangible realities. It’s the fuel that powers your journey toward homeownership, early retirement, or simply a life with less financial stress. This journey begins with understanding the core principles of saving and how to implement them effectively.

The Power of Strategic Saving

Strategic saving involves more than just putting away whatever is left at the end of the month. It requires intention, planning, and discipline. It means making conscious choices about how you allocate your resources, prioritizing your financial future, and aligning your saving habits with your goals.

It means understanding the difference between needs and wants, and consistently choosing to invest in your future. A key component is automating your savings, making it a seamless and consistent process. Set up recurring transfers to your savings or investment accounts.

Financial Literacy: Your Guiding Compass

Financial literacy is the essential knowledge and skills necessary to manage money effectively. It empowers you to make informed decisions about your finances, navigate the complexities of the financial world, and build a solid foundation for long-term success.

Without financial literacy, you're essentially sailing without a compass. You might drift aimlessly, make costly mistakes, and struggle to reach your desired destination. Understanding concepts like interest rates, inflation, and investment options is crucial for making smart financial choices.

Seeking Guidance from the Experts

Navigating the world of personal finance can feel overwhelming, but you don't have to do it alone. Numerous reputable experts and resources can provide valuable insights and guidance.

• Dave Ramsey is known for his straightforward approach to debt management and building wealth.
• Suze Orman offers practical advice on a wide range of financial topics, from saving for retirement to investing wisely.
• Robert Kiyosaki, author of Rich Dad Poor Dad, challenges conventional thinking about money and encourages readers to develop a mindset of financial independence.
• Ramit Sethi, author of I Will Teach You to Be Rich, focuses on automating your finances and making smart investment choices.

Additionally, consider seeking guidance from qualified financial planners who can provide personalized advice based on your specific needs and circumstances. These experts and resources can equip you with the knowledge and tools you need to make sound financial decisions and achieve your goals. Remember, seeking help is a sign of strength, not weakness.

Understanding Your Financial Landscape: Laying the Groundwork

Before embarking on any savings journey, it's essential to understand the terrain. Think of it as preparing for a long hike: you wouldn't set off without understanding the map, weather conditions, and necessary supplies. Similarly, financial success requires a clear understanding of your current financial situation.

This section will guide you through the essential elements of personal finance, focusing on the three foundational pillars: saving, budgeting, and investing. By mastering these concepts, you'll be well-equipped to make informed decisions and set realistic financial goals.

The Three Pillars of Personal Finance

Saving, budgeting, and investing are the cornerstones of a solid financial foundation. Each plays a crucial, yet distinct, role in building wealth and achieving financial security.

• Saving is the act of setting aside a portion of your income for future use. It’s the foundation upon which all other financial goals are built.

• Budgeting is the process of creating a plan for how you'll spend your money. It allows you to track your income and expenses, identify areas where you can save, and ensure that your spending aligns with your priorities.

• Investing is the act of allocating money to assets, such as stocks, bonds, or real estate, with the expectation of generating income or appreciation over time. It's a powerful tool for growing your wealth, but it also involves risk.

Creating a Budget: Taking Control of Your Finances

A budget is your roadmap to financial freedom. It provides a clear picture of where your money is going and helps you identify opportunities to save more. Creating a budget may seem daunting, but it's a straightforward process that can be broken down into two key steps: tracking income and expenses, and identifying areas for reduction.

Tracking Your Income and Expenses

The first step in creating a budget is to track your income and expenses. This can be done using a variety of methods, such as:

• Spreadsheets are a versatile tool for organizing your financial data.

• Budgeting Apps like Mint, YNAB (You Need a Budget), and Personal Capital automatically track your transactions and provide insights into your spending habits.

• Pen and Paper is a simple and effective method for tracking your expenses manually.

Be sure to track all sources of income, including salary, investments, and side hustles. Similarly, track all expenses, no matter how small. Classify your expenses into categories such as housing, transportation, food, entertainment, and debt payments.

Identifying Areas for Spending Reduction

Once you've tracked your income and expenses for a month or two, you'll have a clear picture of where your money is going. This will allow you to identify areas where you can reduce spending.

Look for opportunities to cut back on non-essential expenses, such as:

• Eating out less frequently
• Canceling unused subscriptions
• Finding cheaper alternatives for entertainment
• Negotiating lower rates on your bills

Even small reductions in spending can add up over time, freeing up more money for saving and investing.

The Critical Role of an Emergency Fund

Life is unpredictable. Unexpected expenses, such as medical bills, car repairs, or job loss, can derail your financial progress if you're not prepared. That's where an emergency fund comes in.

Why an Emergency Fund is Essential

An emergency fund is a savings account specifically designated for covering unexpected expenses. It acts as a financial safety net, preventing you from going into debt or dipping into your long-term investments when emergencies arise.

Having an emergency fund can significantly reduce stress and provide peace of mind, knowing that you're prepared for whatever life throws your way.

How Much to Save in an Emergency Fund

The recommended amount to save in an emergency fund is typically 3-6 months of living expenses. This may seem like a large sum, but it's important to have enough to cover your essential needs, such as housing, food, and utilities, in case of a job loss or other financial hardship.

Start small and gradually build your emergency fund over time. Even a small amount is better than nothing. Automate your savings by setting up recurring transfers from your checking account to your emergency fund. Consider high-yield savings accounts to maximize your earning potential while building your fund.

Setting Your Savings Goals: Defining Your Financial Future

Now that you have a handle on your current financial landscape, it's time to look ahead. Saving isn't just about putting money aside; it's about strategically planning for the future you envision. This section will guide you through setting meaningful savings goals, focusing on retirement planning and the incredible power of compound interest.

Planning for Retirement: Securing Your Golden Years

Retirement might seem like a distant concern, especially if you're just starting your career. However, the sooner you start planning, the better prepared you'll be to enjoy your golden years comfortably.

Retirement planning involves more than simply saving a large sum of money. It's about carefully estimating your future needs and developing a plan to meet those needs.

Estimating Your Retirement Needs

So, how much will you actually need to retire? This is a crucial question with no one-size-fits-all answer. Several factors come into play, including your desired lifestyle, anticipated healthcare costs, and inflation.

Online retirement calculators can be invaluable tools for estimating your retirement needs. These calculators typically take into account your current age, income, savings, and desired retirement age to project the amount you'll need to accumulate.

Remember to factor in potential sources of retirement income, such as Social Security or pensions.

The Power of Starting Early

One of the most significant advantages you have in retirement planning is time. The earlier you start saving, the more time your money has to grow through the magic of compound interest.

Even small, consistent contributions made early in your career can have a substantial impact on your retirement savings. Don't underestimate the power of starting small; the key is to get started now.

Unleashing the Magic of Compound Interest

Albert Einstein supposedly called compound interest the "eighth wonder of the world." Whether or not he actually said it, the sentiment rings true. Compound interest is a powerful force that can significantly accelerate your wealth accumulation.

Understanding the Mechanism

Compound interest is essentially earning interest on your interest. When you earn interest on your savings, that interest is added to your principal balance. In the next period, you earn interest not only on your original principal but also on the accumulated interest.

This creates a snowball effect, where your earnings grow exponentially over time.

Demonstrating the Long-Term Impact

The real magic of compound interest becomes apparent over the long term. Even small differences in interest rates or contribution amounts can lead to vastly different outcomes over several decades.

To illustrate the power of compound interest, use online calculators to model different scenarios.

Experiment with various starting amounts, interest rates, and contribution frequencies to see how these factors impact your long-term savings.

Setting SMART Savings Goals

Having a clear savings goal is essential to stay motivated and on track. But not all goals are created equal. To maximize your chances of success, it's crucial to set SMART goals: Specific, Measurable, Achievable, Relevant, and Time-bound.

• Specific: Clearly define what you want to achieve. Instead of "save more money," aim for "save $500 per month."
• Measurable: Establish a way to track your progress. Use a budgeting app or spreadsheet to monitor your savings.
• Achievable: Set realistic goals that are challenging but attainable. Don't set yourself up for failure by aiming too high too quickly.
• Relevant: Ensure your goals align with your overall financial objectives and values.
• Time-bound: Set a deadline for achieving your goals. This creates a sense of urgency and helps you stay focused.

By setting SMART savings goals, you'll be well-equipped to define your financial future and achieve your dreams.

Navigating the Challenges: Staying on Track in Your Savings Journey

Even with well-defined savings goals and a solid financial foundation, the path to financial security isn't always smooth. Unexpected challenges like inflation and high debt can threaten to derail your progress.

Understanding these obstacles and implementing strategies to overcome them is crucial for staying on track and achieving your financial dreams.

The Silent Thief: Understanding Inflation's Impact on Savings

Inflation, the gradual increase in the price of goods and services over time, is a silent but powerful force that erodes the purchasing power of your savings.

What you can buy with $100 today might cost $105 or more in the future, diminishing the real value of your saved money if it's not growing at a sufficient rate.

How Inflation Works

Imagine you're saving for a new car that costs $25,000. If inflation averages 3% per year, that same car could cost significantly more in just a few years.

If your savings aren't growing at least at the rate of inflation, you're effectively losing ground.

Strategies for Outpacing Inflation

The key to combating inflation is to ensure your savings and investments are growing at a rate that exceeds the inflation rate. Here are some effective strategies:

• Investing in the stock market: While stocks carry more risk than traditional savings accounts, they also offer the potential for higher returns. Historically, the stock market has outpaced inflation over the long term.
• Real estate: Investing in real estate can provide both income and potential appreciation, offering a hedge against inflation.
• Inflation-protected securities: Treasury Inflation-Protected Securities (TIPS) are designed to protect investors from inflation by adjusting their principal value based on changes in the Consumer Price Index (CPI).
• Commodities: Certain commodities, such as gold and silver, tend to hold their value during inflationary periods.

Consider consulting with a financial advisor to determine the best investment strategy for your individual circumstances and risk tolerance.

Managing Debt-to-Income Ratio (DTI): A Key Indicator of Financial Health

Your Debt-to-Income Ratio (DTI) is a crucial metric that lenders use to assess your ability to manage debt. It compares your monthly debt payments to your gross monthly income.

A high DTI can indicate that you're overextended and may struggle to meet your financial obligations, including your savings goals.

Calculating Your DTI

To calculate your DTI, divide your total monthly debt payments (including rent or mortgage, credit card bills, student loans, car loans, etc.) by your gross monthly income (your income before taxes and deductions).

Multiply the result by 100 to express it as a percentage.

DTI = (Total Monthly Debt Payments / Gross Monthly Income) x 100

For example, if your total monthly debt payments are $1,500 and your gross monthly income is $5,000, your DTI would be 30% ($1,500 / $5,000 x 100 = 30%).

Assessing Your DTI

Generally, a DTI of 36% or less is considered healthy, indicating that you have a good balance between debt and income.

A DTI between 37% and 42% may raise some concerns, while a DTI above 43% is often viewed as high-risk and may make it difficult to qualify for loans.

Strategies to Lower Your DTI

If your DTI is higher than you'd like, there are several strategies you can employ to lower it and improve your financial health:

• Pay down debt: Focus on paying down high-interest debt, such as credit card balances, as quickly as possible. Consider strategies like the debt snowball or debt avalanche method.
• Increase your income: Explore opportunities to increase your income, such as taking on a side hustle, asking for a raise at work, or pursuing additional education or training to enhance your skills.
• Refinance debt: If possible, refinance your existing debt to a lower interest rate. This can significantly reduce your monthly payments and improve your DTI.
• Avoid taking on new debt: Be mindful of your spending habits and avoid taking on new debt unless absolutely necessary.

By understanding the impact of inflation and actively managing your DTI, you can navigate the challenges of saving and stay firmly on the path to achieving your financial goals.

Advanced Saving Strategies: Taking It to the Next Level

For those who have mastered the fundamentals of saving and are eager to accelerate their progress towards financial freedom, several advanced strategies can be explored. These strategies, while potentially demanding, offer the opportunity to significantly shorten the timeline to financial independence and security.

Two key concepts in this realm are the Financial Independence, Retire Early (FIRE) movement and the strategic allocation of assets to optimize returns and mitigate risk. Let's delve into each of these, examining their core principles and practical applications.

Understanding the FIRE Movement

The FIRE movement represents a radical approach to saving and investing, aiming to achieve financial independence and retire much earlier than traditional retirement age. It's not just about early retirement; it's about gaining control over your time and pursuing passions free from financial constraints.

Core Principles of FIRE

The FIRE movement rests on two fundamental pillars: aggressive saving and strategic investing.

Proponents of FIRE typically aim to save a significant portion of their income, often exceeding 50% or even 70%. This requires a conscious effort to minimize expenses and maximize earnings.

The saved funds are then invested in a diversified portfolio of assets, with the goal of generating passive income that can cover living expenses in retirement.

A common guideline is the "4% rule," which suggests that you can safely withdraw 4% of your investment portfolio each year without depleting the principal.

For example, if your annual expenses are $40,000, you would need a portfolio of $1 million to retire under the 4% rule.

Is FIRE Right for You?

While the FIRE movement can be incredibly appealing, it's essential to consider whether it aligns with your individual values, lifestyle, and financial circumstances.

The intense focus on saving and frugality may not be sustainable or desirable for everyone. It often requires significant sacrifices in current spending and a willingness to embrace a minimalist lifestyle.

Furthermore, the FIRE movement typically involves investing in assets that carry some level of risk, such as stocks. It's crucial to assess your risk tolerance and ensure you're comfortable with the potential for market fluctuations.

Ultimately, the decision of whether to pursue FIRE is a personal one. It requires careful consideration of your goals, values, and financial situation.

If you're drawn to the idea of early retirement and are willing to make the necessary sacrifices, FIRE may be a viable path. However, it's essential to approach it with realistic expectations and a solid understanding of the risks involved.

Diversification Through Asset Allocation

Regardless of whether you're pursuing FIRE or a more traditional savings strategy, asset allocation is a crucial component of long-term financial success.

Asset allocation involves dividing your investment portfolio among different asset classes, such as stocks, bonds, real estate, and commodities, to optimize returns and mitigate risk.

Matching Asset Allocation to Risk Tolerance

Your ideal asset allocation will depend on several factors, including your age, financial goals, and risk tolerance.

Risk tolerance refers to your ability and willingness to withstand potential losses in your investments.

Generally, younger investors with a longer time horizon can afford to take on more risk, as they have more time to recover from potential losses.

This often means allocating a larger portion of their portfolio to stocks, which have historically offered higher returns but also carry greater volatility.

As you approach retirement, it's generally advisable to shift towards a more conservative asset allocation, with a greater emphasis on bonds and other lower-risk investments.

This can help to protect your portfolio from significant losses and ensure a more stable income stream in retirement.

There are various online tools and resources available to help you assess your risk tolerance and determine an appropriate asset allocation strategy. Consulting with a financial advisor can also provide personalized guidance based on your unique circumstances.

By carefully considering your risk tolerance and implementing a diversified asset allocation strategy, you can increase your chances of achieving your financial goals while minimizing potential losses.

Monitoring and Adjusting Your Strategy: Staying Adaptive

No financial plan is ever truly "set it and forget it." The world changes, your circumstances evolve, and your financial goals may shift over time. Regularly monitoring your progress and being willing to adjust your strategy are crucial for long-term financial success.

This section will delve into the importance of tracking your net worth and understanding opportunity cost in savings decisions. These two elements empower you to proactively manage your finances and adapt to life's inevitable changes.

The Power of Tracking Your Net Worth

Tracking your net worth is like taking a regular health checkup for your finances. It provides a clear snapshot of your overall financial health at a specific point in time.

It is a crucial feedback mechanism that illuminates whether your financial strategies are truly effective.

Why is Tracking Net Worth Valuable?

Tracking net worth offers several key benefits:

• Provides a Comprehensive View: Net worth consolidates all your assets and liabilities into a single, easy-to-understand number.
• Measures Progress Over Time: By tracking your net worth regularly (e.g., monthly or quarterly), you can monitor your financial progress and identify trends.
• Identifies Areas for Improvement: A stagnant or declining net worth can signal potential problems, such as excessive debt or insufficient savings.
• Motivates Positive Financial Behavior: Seeing your net worth grow can be highly motivating and encourage you to continue making smart financial choices.
• Offers a Clear Picture Before Investing: Knowing your net worth can provide a baseline to understand what you can afford to invest.

How to Calculate Your Net Worth

Calculating your net worth is a straightforward process:

1. List Your Assets: Include everything you own that has monetary value. This might include:
   • Cash in checking and savings accounts
   • Investments (stocks, bonds, mutual funds, retirement accounts)
   • Real estate
   • Vehicles
   • Other valuables (jewelry, collectibles)
2. List Your Liabilities: Include all your debts and obligations:
   • Mortgage
   • Student loans
   • Credit card debt
   • Auto loans
   • Personal loans

Net Worth = Total Assets - Total Liabilities

Many budgeting apps and financial websites offer tools to automatically calculate and track your net worth, simplifying the process.

Opportunity Cost and Your Savings Decisions

Every financial decision involves a trade-off. When you choose to spend money on one thing, you're giving up the opportunity to use that money for something else.

This "something else" is known as opportunity cost.

Making Informed Choices

Understanding opportunity cost is vital for making informed savings decisions. It forces you to consider the potential long-term benefits of saving versus the immediate gratification of spending.

For example, spending $5 daily on coffee might not seem significant. However, if you saved that money and invested it, the returns could be substantial over time due to the power of compounding.

Balancing Current Needs with Long-Term Goals

The key is to strike a balance between meeting your current needs and saving for the future. Denying yourself all enjoyment in the present is unlikely to be sustainable.

Instead, prioritize your spending and identify areas where you can cut back without significantly impacting your quality of life.

Ask yourself: "Is this purchase truly necessary, or am I making it out of impulse or habit?"

Consider these strategies for finding that balance:

• Prioritize Experiences: Sometimes, spending money on experiences (travel, concerts, etc.) can provide more lasting value than material possessions.
• Automate Savings: Set up automatic transfers from your checking account to your savings or investment accounts to ensure you're consistently saving.
• Set Realistic Budgets: Create a budget that allows for both essential expenses and discretionary spending, but be mindful of your overall savings goals.
• Re-evaluate Regularly: Periodically review your spending habits and savings progress to ensure you're on track and adjust as needed.

By consciously considering opportunity cost and making informed financial decisions, you can increase your savings rate and accelerate your journey towards financial well-being.

Choosing the Right Accounts: Where to Put Your Money

Once you've established your savings goals and understand the importance of consistent saving, the next crucial step is choosing the right accounts to house your money. The options can seem overwhelming, but understanding the characteristics of different account types is key to maximizing your savings potential and reaching your financial objectives.

This section serves as a guide to navigating the world of savings and investment accounts, helping you identify the most appropriate options for your individual needs and goals.

Exploring Investment Firm Options

Investment firms like Vanguard, Fidelity, and Schwab offer a wide array of investment accounts designed to help you grow your wealth over time. These accounts are typically used for long-term goals like retirement, but can also be used for other financial objectives, such as saving for a down payment on a house or funding your children's education.

Understanding Different Investment Account Types

Let's explore some of the most common investment account types:

Roth IRA

A Roth IRA (Individual Retirement Account) is a retirement savings account that offers tax advantages. You contribute after-tax dollars, but your earnings and withdrawals in retirement are tax-free, provided certain conditions are met. This can be a powerful tool for long-term wealth accumulation, especially if you anticipate being in a higher tax bracket in retirement.

401(k)

A 401(k) is a retirement savings plan sponsored by your employer. Many employers offer matching contributions, which is essentially free money that can significantly boost your retirement savings. Contributions are typically made before taxes, reducing your current taxable income. However, withdrawals in retirement are taxed as ordinary income.

Taxable Brokerage Accounts

A taxable brokerage account offers flexibility and accessibility. Unlike retirement accounts, there are no contribution limits or withdrawal restrictions. However, investment gains within the account are subject to capital gains taxes. This type of account is suitable for investing beyond retirement savings or for goals that require access to your funds before retirement age.

Other options:

• SEP IRA: Simplified Employee Pension Plan, ideal for self-employed individuals and small business owners
• SIMPLE IRA: Savings Incentive Match Plan for Employees, a retirement plan for small businesses
• Brokerage Account: A taxable investment account for stocks, bonds, and mutual funds

Discussing the Role of Banks and Credit Unions

While investment firms are geared towards long-term wealth building, banks and credit unions play a crucial role in managing your short-term savings and providing accessible funds for everyday needs.

Choosing the Right Savings Accounts for Different Goals

Here's a look at some common savings account options offered by banks and credit unions:

High-Yield Savings Accounts (HYSAs)

High-yield savings accounts offer significantly higher interest rates than traditional savings accounts. This makes them an excellent choice for building an emergency fund or saving for short-term goals, such as a vacation or a new car. The higher interest rate helps your money grow faster while remaining easily accessible.

Certificates of Deposit (CDs)

Certificates of deposit (CDs) are savings accounts that hold a fixed amount of money for a fixed period, typically ranging from a few months to several years. In exchange for locking up your money, you receive a higher interest rate than you would with a regular savings account. CDs are a good option if you have a lump sum of money that you don't need immediate access to and want to earn a guaranteed return.

The most suitable savings account will vary based on your specific financial circumstances and objectives. Understanding the differences between account types and their corresponding benefits empowers you to make informed decisions that align with your unique savings strategy and desired financial outcomes.

Tools and Resources to Help: Streamlining Your Savings Journey

Saving money consistently can feel like an uphill battle, but fortunately, a wealth of tools and resources are available to simplify the process and improve your results. These aids can range from sophisticated budgeting applications to straightforward savings calculators, each designed to provide clarity and control over your financial journey. Let's explore some key resources that can help you achieve your savings goals.

Budgeting Apps: Your Financial Control Center

Budgeting apps have revolutionized how we manage our finances. These tools offer an intuitive way to track your spending, categorize expenses, and visualize your financial health. Popular options like Mint, YNAB (You Need a Budget), and Personal Capital provide comprehensive features that streamline the budgeting process.

How Budgeting Apps Simplify Financial Management

Automation is Key. The primary advantage of using budgeting apps is the automation of expense tracking. By linking your bank accounts and credit cards, these apps automatically categorize transactions, eliminating the need for manual data entry. This real-time tracking provides an accurate picture of where your money is going.

Many apps also offer customizable budgeting categories, allowing you to tailor your budget to your specific spending habits and financial priorities. You can set spending limits for each category and receive alerts when you're approaching or exceeding your budget.

Furthermore, budgeting apps often include goal-setting features. You can set targets for saving, debt repayment, or investments, and the app will track your progress toward those goals. This visual representation of your financial objectives can be highly motivating.

Finally, most budgeting apps offer insightful reports and analytics. These reports can help you identify spending trends, pinpoint areas where you can cut back, and optimize your budget for maximum savings.

Savings Calculators: Projecting Your Financial Future

Savings calculators are another invaluable tool for planning and achieving your financial goals. These calculators use mathematical formulas to project the growth of your savings over time, taking into account factors such as interest rates, contribution amounts, and investment returns.

Benefits of Using Savings Calculators

Savings calculators empower you to visualize the potential impact of your savings efforts. By inputting different scenarios, you can see how changes in your savings rate or investment returns can affect your long-term financial outcomes.

These calculators are particularly useful for setting realistic savings goals. Whether you're saving for retirement, a down payment on a house, or another major purchase, a savings calculator can help you determine how much you need to save each month to reach your target.

Another benefit is the ability to experiment with different savings strategies. You can use a calculator to compare the impact of various investment options or to explore the effects of making extra contributions to your savings accounts.

There are many savings calculators available online for free. You can find calculators specifically designed for retirement planning, compound interest calculations, and target savings goals. Choose a calculator that aligns with your specific needs and financial objectives.

By leveraging these tools and resources, you can take control of your finances, streamline your savings efforts, and move closer to achieving your long-term financial goals.

So, what percent of your income is going to savings each month? Hopefully, this gave you some food for thought and a few actionable steps. Remember, personal finance is personal, so adjust the guidelines to fit your situation. Don't get discouraged if you're not hitting the recommended percentages right away; just keep making progress, and you'll be well on your way to a more secure financial future!