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How much savings should I have? 4 ways to figure out if you have enough

How much savings should I have?

This depends on what you want to do with your money or for your money to do for you.

If you don’t know how much is enough or think more is the answer, you might find that it’s a never-ending worry.

Figuring out your financial Goldie locks formula might help remove a lot of anxiety and sleepless nights wondering how much savings you should have.

Not too little, not too much, but just the right amount for your situation.

Enough to ride out any storms, enough so you can make good choices and enough that helps you do the things you love.

Read on to hear how you can figure out how much savings is enough for you.

How much savings should I have
I’m saving for a unicorn: Photo by Annie Spratt on Unsplash

What is considered a good amount to have in savings?

Determining what constitutes a “good” amount to have in savings is a nuanced question that varies from person to person, largely depending on individual financial goals, lifestyle choices, and life stage.

However, a general guideline often recommended by financial experts is to have at least three to six months’ worth of living expenses in an easily accessible emergency fund.

This provides a financial cushion that can be invaluable in case of unexpected events like job loss, medical emergencies, or urgent home repairs.

Beyond the emergency fund, additional savings should be aligned with your short-term and long-term objectives, whether that’s buying a home, starting a business, or planning for retirement.

The average savings rate in the UK has fluctuated, but aiming to save at least 20% of your income is a good rule of thumb.

The key is to start saving as early as possible, even if it’s a small amount, and to increase that over time.

Compound interest can work wonders on your savings, turning even modest contributions into a substantial sum over time.

So, while there’s no one-size-fits-all answer, a good amount in savings aligns with your financial goals and provides peace of mind.

Figure out what you want your money to do for you.

Now, this might sound a little strange “I want my money to make me rich, of course”.

Ok, so how rich?

And what will you be doing with the money, and how will this make you happy?

Some core things that money can help with

  • Feelings of safety
  • Feeling like you have options
  • Happiness(!)

Now before anyone gets triggered, let’s go through these slowly.

Feelings of safety = if you felt like you had enough savings when things go wrong, you wouldn’t need to panic because you have funds to prevent, mitigate or recover from the problem.

  • House or car repairs
  • Redundancy
  • Medical bills
  • Sudden or unexpected expenses.

Options = similar to the above if you have savings, you have more options

  • Take that course
  • Take a break from work or work part-time
  • Take that holiday
  • Buy that thing instead of the other one


Money can help with happiness too.

“BUT BUT I thought money couldn’t buy happiness”.

No, it can’t, but it can help with the things that do bring happiness.  If you have enough savings, it can help towards the below.

  • More free time with family and friends
  • The ability to say yes and no to things that add or take away from your happiness.
  • Do the things, visit the places, learn the skills you have always wanted to
  • To support others that need your help.
  • Take some risks, change jobs, start a business without worrying about where the next paycheck will come from.

If your money isn’t helping towards your happiness, your probably not using it correctly.

If you want your money to help you feel safer, give you more options, improve your happiness, and then read on to see how this might happen for you.

Consider immediate vs long term needs

Figuring out when and for what you might need savings will be a good starting point to understand how much savings you need.

What are your daily, weekly, monthly and yearly needs? Write these number down.

Do you track these numbers to understand what is going on?

If not, this might be part of the problem you don’t know how much you need.

If you lost your job, how much money would you need to survive a month or a few months?

A standard amount of money often recommended in an emergency fund is 3-6 months of living costs.

You might want to adjust this up or down give your circumstances

  • If you have significant debts
  • If you have a single source of income
  • How easy you think it might be to find another job
  • If you are expecting a global pandemic
  • How easily you want to sleep at night

Having a spending plan will help identify what is needed, when and how much to help you understand how much savings you need.

There are plenty of free and paid-for apps out there now that will help with the process. Tracking what has happened but also helping you steer where your money goes in the future.

Are there things out there in the future that you want to see, do or be? How much money might these cost?

  • The around the world trip
  • The course you have always wanted to do
  • Making a career pivot
  • Working part-time
  • Starting that side hustle
  • Making work optional one day(!!)

Plotting these on a timeline can help you understand when you need the money and how much you need to start saving now to get there.

Remember, this will always be a balance between what you want right now and what you want most.

  • Cake vs six pack abbs
  • More free time or more stuff
  • Yolo youth vs poverty in your old age

Balancing between the current you and the unknown older you may be tricky, but one way or another, you will end up inheriting the good, bad and ugly decisions made along the way.

Build a plan to achieve more of what’s important to you

Mapping your likely immediate and long-terms needs might see you identify what’s important to you and needs saving for.

  • Immediate 1-2 years
  • Intermediate 2-5 years
  • Long-term 10 years and up

With this rough time scale and list of things you need and might want (yes, you can save for things you want also), you can start to understand how much saving you should have to achieve more of what’s important to you.

What are your goals across your life?

Are there things you would like to achieve across the many areas of your life?

Would having savings help towards these?

Writing down a few key things, you would like to achieve or experience or support might help give you the motivation and direction to look for ways to save more.

Figure out where the savings with come from

Ok, so yes, we all get that savings are essential, and the more you have, the more options you likely have.

But where will they come from?

You could do one or all of these to find ways to cut, out, cut back, change or create more savings

With the previously mentioned spending plan, you will see where your money is going and if there are ways to give your money better jobs to do.

All your money should be given jobs to do

  • Keep the lights on, water running, food on the table
  • Provide the right clothes for the right time of year
  • To give you the time and means to meet up with friend and family
  • And create options for you now and in the future.

It might also be the case that some of your monies job is to be wasted – let’s hope it’s not too much of your money that’s sent to do that.

Paying yourself first is one of the best ways to create savings. It’s also a straightforward way to give your money, one of its most important jobs.

Giving you a safety net, creating options, keeping you comfortable and giving you independence now or in the future, i.e., early or later retirement/ making work optional if you prefer that wording.

Summary Table: How Much Savings Should I Have? 4 Ways To Figure Out If You Have Enough

TopicKey Points
Purpose of SavingsUnderstand what you want your money to do for you. It could be for safety, options, or happiness.
Immediate vs Long-Term NeedsIdentify your daily, weekly, monthly, and yearly financial needs. This will help you figure out how much you need to save.
Emergency FundAim for 3-6 months of living costs to ride out any financial storms. Adjust this based on your circumstances.
Spending PlanUse apps or manual tracking to understand your spending habits and needs. This will help you identify how much you need to save.
Goals and TimeframesPlot your financial goals on a timeline to understand when you’ll need money and how much you should start saving now.
Creating SavingsConsider cutting back on expenses or increasing your income to boost your savings. Automate the process to make it easier.
How much should I save?

FAQ: How much savings should I have?

How much does the average person have in savings?

On average, women have just over £6k in their savings and men a little over double this
But seriously, what has that got to do with you and what you might need?

How much should a single person have in savings?

Enough to last without an income for at least 3-6 months
Enough to start building options now and plan for the future

How much savings should I have at 35?

Enough to last without an income for at least 3-6 months
Enough to create options now and plan for the future

What should I do with 20k in savings?

You could do one or all of these depending on where the £20k sits within your overall finances.
Save it
Spend it
Invest it
Give it away
It all depends what you want to achieve with this extra money

Is 100k in savings a lot?

Yes it is a a good amount of money and a great launch pad for serious money
With 100k in savings you will actually start to see compound growth start to happen.

How much money should I have saved by 25 UK?

Enough to cover 3-6 months expenses
Enough to build towards the things you really want in life

How much savings should I have at 40?

Enough money to fill an emergency fund for 3-6 months.
Paid off expensive debts
Enough income-generating assets that are going to make work optional for you in the near future.
Here’s an article on that very thing.

Summary: How much savings should I have?

Figure out what you want your money to do for you

If you have an idea of this, it will help you understand how much savings you need.

3-6 months of livings costs in savings is likely to help ride out any emergencies; what else would you like your money to do for you and when?

Figure out you’re immediate vs long-term needs

What do you need this week, month and year to have a comfortable life?

What might you need in the next 5-10 years, and how much might you need to make work optional one day?

With these estimates, it’s going to help you understand how much you need to save every month.

It will be a balance between your current self and your future self; don’t let either one screw over the other.


Figure out your goals, what actions you need to take, what money you will need and execute the plan.

Review the progress and adjust accordingly. It’s ok to zigzag to the right place.

Figure out where the savings will come from

Will they come from cutting back, cutting out, and shopping around for the best prices?

Automate your savings to pay yourself first, remove the weakest link in the savings process, you!

Create more sources of income with side hustles, some you like doing, have skills in, the world needs and people will pay you for.

Anyway, those are my thoughts on how much savings should I have? Let me know yours in the comments below.

If you’ve made it this far, congratulations! You’re already taking steps towards a healthier financial future. But maybe you’re feeling a bit overwhelmed. Maybe the of budgeting, saving, and investing still makes you break out in a cold sweat. Don’t worry, you’re not alone, and help is available.

At Financially Happy Money Coaching, I understand money isn’t just about numbers. It’s about emotions, behaviours, and life choices. That’s why we’re here to help you take the stress out of money and build wealth that aligns with your values and lifestyle.

Whether you’re just starting out on your financial journey or you’re looking to take your finances to the next level, we’re here to guide you every step of the way. I’ll help you understand your financial behaviours, set realistic goals, and create a personalized plan to achieve those goals.

So, why wait? Start your journey towards financial happiness today. Remember, the best time to start was yesterday. The second best time is now.

Click here to schedule your consultation and let’s make your money work for you, not vice versa. 💪💰

Remember, financial freedom isn’t a destination; it’s a journey. And every journey is easier when you have a guide. So, let’s embark on this journey together and create a financially happy future. 🚀💸

📚 Financial Freedom Resources

  1. The Ultimate Guide To Building Your Savings to $100,000! 📘 is a transformative book that equips readers with principles, strategies, and the mindset 🧠 needed to reach a $100,000 savings goal 💰. It’s a journey towards financial freedom 🚀, challenging beliefs 🤔, embracing new habits 🔄, and overcoming obstacles 💪.
  2. How to Manage Your Finances: Your Guide to Financial Freedom 📘 is a comprehensive resource packed with practical advice on budgeting 💰, investing 📈, reducing debt 💳, and building wealth 💎. It’s an essential guide for anyone, novice or experienced, aiming to take control of their financial future and achieve financial independence 🚀.

Remember, self-study is a powerful tool for life and financial transformation. Happy reading! 🎉

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