By Vance Cariaga, Adam McFadden, and Ashley Barnett, CNN Underscore Money, featuring Vincent Birardi, CFP®, AIF®, Wealth Advisor at Halbert Hargrove

Saving money is an essential part of smart financial management, but few people are really good at it. And according to Federal Reserve data, most Americans don’t have nearly enough money saved up.

Developing a savings plan should begin as soon as you enter the working world and continue all the way into retirement. Ideally, you’ll follow expert guidelines on how much to save at each age. At the very least, you should be making a consistent effort to grow your savings.

Why should I save?

The main reason to save money is for financial security. Savings give you a financial cushion during rough patches and help you build wealth.

“Saving money is foundational to planning a secure, financial future,” said Chris Starr, head of consumer and small business deposits at Wells Fargo. “Starting the practice of saving money — even a small amount every month — is the first step to help you protect and build wealth. It gives you a sense of security and peace of mind knowing that you’re saving money to reach your future goals, as well as to build a cushion in the event of unexpected life events and emergencies.

Saving early is important for a couple of reasons. First, it allows you to build an emergency fund to cover expenses should you suffer a sudden loss of income. Second, you benefit from the compounding effect.

“The interest you earn is added to the principal, earning more interest,” Starr said. “Every year you delay means you will need to save an even bigger percentage of your paycheck to meet your goals.”

Saving money is a lifetime process that shifts as you get older. How much you’ll save depends on your income, expenses, family situation and financial goals. There are numerous guidelines on how much to save by age group, and none are exactly the same.

“You should consult a professional such as a Certified Financial Planner to determine a personalized retirement savings amount for your particular financial situation,” said Vincent Birardi, CFP, a wealth advisor with Halbert Hargrove.

Here’s a look at the savings by different age groups and how they compare to what experts recommend.


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