How much money should a 20 year old have saved?

Saving for an emergency fund can be a daunting task, especially if you're just starting out in life. But it's important to start saving when you're young so that you'll have money set aside when your expenses get higher down the road.

The short answer to this question is you should have at least 4 months of fixed expenses saved up

The short answer to this question is you should have at least 4 months of fixed expenses saved up.

The longer answer requires a bit more context. If you were to lose your job today and had no other means of income, how long would it last before your savings ran out?

For example, if you were paying $2,000 per month in rent and another $1,000 per month for other fixed expenses (like groceries), then having 4 months' worth of living expenses in the bank would be enough to get by while looking for new work.

Another way of looking at this is that if you had an emergency fund with enough cash on hand to cover all your bills for 4 months straight without dipping into any debt or resorting to pawning off personal items just so things could continue as normal until finding another job or getting paid again somehow (which is unlikely).

But there's a bit more to it than that

After you've saved enough to cover your fixed expenses, it's time to start saving for other goals. Here are some things you should consider:

• Retirement. You should save enough money so that you can comfortably retire without having to worry about how much money is in your 401(k). A good starting point is four times your annual salary. If you make $40,000 a year, that means saving $160,000 before retirement age!
• Other financial goals (like buying a house or car). Your 20s are a great time to start building up savings for these big purchases as well. Even if these things don't happen for another 10 years or so, it's better to save now than not at all!
• An emergency fund. Saving up an emergency fund of three months' worth of expenses will help give peace of mind when unexpected expenses come up ($2 million isn't enough when Apple invents the next iPhone).

If you already have a job, the smartest way to save up emergency savings is to get your company's 401K plan started

If you already have a job, the smartest way to save up emergency savings is to get your company's 401K plan started. A 401(k) plan is a type of retirement investment account that allows you to invest money with pre-tax dollars and pay no taxes on this income until it's time for you to start drawing from your account in retirement.

Since there are no tax obligations on the earnings generated by your investments, this can be a great way for young people like yourself to build up emergency savings without having to worry about paying taxes on the interest or gains earned by their investments (a process called "tax-deferred").

You should aim to contribute 10% of your income if at all possible—this will put you well ahead of most people who haven't started saving yet at this age! If that seems too much right now, try contributing 5%, but remember: every bit helps!

While saving for retirement and saving for an emergency might seem like two different things, they're actually not

Because they're so closely related, it can be difficult to distinguish between the two goals. Even if you're not saving for retirement and you have no plans to retire in the next decade or two, it's still important that you save money for an emergency fund.

The reason is simple: A lot of people use their retirement savings when they need a financial cushion in their later years. If we didn't have access to our 401(k)s after age 59½ (or equivalent), we'd have to come up with a different way of dealing with unexpected expenses and many of us don't have enough cash on hand for that purpose.

So while saving for retirement may seem like it has nothing do with saving up an emergency fund, both are really just different ways of addressing the same problem: providing yourself with enough resources so that an unexpected event doesn't derail your life plans or finances entirely

The best way to save money for both long term and short term financial goals is by not having to pay taxes on it in the first place

A great way to save money for both long-term and short-term financial goals is by not having to pay taxes on your investment returns. The sooner you start investing, the more time your investments have to grow. And depending on what type of account you invest in, some or all of your earnings may be tax free.

There are two main types of investment accounts: taxable and tax-advantaged. A taxable account means that any profit is subject to federal income tax as well as state income taxes (if applicable).

Taxable accounts include individual retirement accounts (IRAs), 401(k)s, and savings accounts at banks or brokerage firms like Charles Schwab or Fidelity Investments. You're required by law to report any profits made in these types of accounts if they exceed certain thresholds set by the Internal Revenue Service (IRS).

This means a 20 year old should save at least as much as they would expect to pay in taxes on their income

If you're a 20 year old, you probably make about $25,000 a year. That's a good start. But if you want to be smart about your money, you'll save at least as much as the amount that would be taken from your paycheck in taxes—just like saving for retirement.

In most cases, this means saving at least $1,500 per year: the average 20-year-old pays around 15% of their income toward federal income tax and another 5% toward state taxes (depending on where they live). If they put that money into an IRA or 401(k), they'll be able to retire with more than just Social Security benefits when they turn 65!

Saving 4 months of fixed expenses is a goal

That a 20 year old can reach without too much difficulty, but those expenses will grow over time.

The amount of money you need to save depends on your personal situation and goals. A 20 year old should have at least four months of fixed expenses in savings, but this number will likely increase as you get older.

You should also save for short-term goals like an emergency fund, a down payment for a car or home, and large purchases like furniture or equipment for your profession.

Finally, having an investment account can help you build wealth over time by investing in the stock market or mutual funds which provide returns on your initial investment (and sometimes more).

The answer to this question is simple: you should have at least 4 months of fixed expenses saved up. But there's a bit more to it than that. If you already have a job, the smartest way to save up emergency savings is to get your company's 401K plan started.

While saving for retirement and saving for an emergency might seem like two different things, they're actually not. The best way to save money for both long-term and short-term financial goals is by not having to pay taxes on it in the first place. This means a 20 year old should save at least as much as they would expect to pay in taxes on their income!