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[quote=Anonymous]In your twenties and thirties, my philosophy is to put in the max you can into savings. This is the easiest time to do it since you should have the lowest expenses.

Things you need to think about: retirement, emergency savings, housing - do you want to purchase housing at some point in the future, any current debt you have.

Current Debt: car, student loans, credit card debt.  Try to pay off your credit card every month - use it as a cash flow mechanism not as debt.  If you find that you tend to buy more than you should, consider not using a credit card and using a debit card instead.  Debit cards take money out of your account when you use them.  Credit cards bill you once a month and if you pay them off once a month, you do not incur any interest charges.  Pay off cars as soon as possible.  Pay off student loans faster the higher the interest rate.

Do the max your employer allows if you have access to a 401k (or similar).  This is frequently 15%.  If you set it up now at the start, you will never get used to spending that money.  If you can do a ROTH 401k do it, your tax load should be at its lowest the younger you are (assuming you increase your income as you work and age).  ROTH IRAs are also good.  If you can do both the 401k and ROTH, do it.  If not, the priority should be 401k % to the max your employer will add more in, then ROTH IRAs, then increase the 401k percentage to the max allowed by your employer.

Save for an emergency fund to be about 6 months of your expenses and increase it as your expenses increase.  This is the easiest way to set it up.

Then, think about if you want to save for housing.  This is above the retirement and emergency fund savings.  As you meet your emergency fund goal, you can put the monthly contribution you made to increase your emergency fund towards your future housing.  You can also plow any bonuses into it.  Once you pay off student loans, you can add that monthly expense towards your future housing.

Having roommates if much less expensive than living on your own.  It allows you to save and spend more on other things.  If you have the opportunity, living at home for free can be the best arrangement, BUT you need to come up with a budget to figure out what it would coast you to move out and live elsewhere - save all of that each month - then you will be used to having the limited extra cash to spend.  Setting up good spending habits is important.  My DC, lived at home for 2 1/2 years and saved $3k more a month while he was here.  That gave him a great starting point for savings.  [/quote]

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