Looking to save money but not sure how much to aim for? The « 3-6-9 rule » suggests saving 3, 6, or 9 months of take-home pay, depending on your financial situation and goals. Those starting out with saving or with low expenses should aim for 3 months, while those with higher incomes, more expenses, or less stable jobs should aim for 6 months. Those with high incomes, high expenses, or high-risk jobs should aim for 9 months. Following these guidelines can help create a safety net for unexpected expenses and achieve long-term financial goals.
What is the 3 6 9 rule of saving?
When it comes to saving money, it can be hard to know where to start. How much should you save? How often? And for what purpose? That’s where the « 3-6-9 rule » comes in. This rule suggests that you should aim to save 3, 6, or 9 months of your take-home pay, depending on your financial situation and goals.
What are the guidelines for each savings target?
If you’re not sure which savings target is right for you, here are some guidelines to help you decide:
Saving 3 months of take-home pay
If you’re just starting out with saving, or if you have a stable job and low expenses, saving 3 months of your take-home pay may be a good place to start. This can help you cover unexpected expenses, such as a car repair or medical bill, without having to dip into your other savings.
Saving 6 months of take-home pay
If you have a higher income, more expenses, or a less stable job, you may want to aim for 6 months of take-home pay in savings. This can help you cover a longer period of unemployment or a major life event, such as a divorce or illness.
Saving 9 months of take-home pay
If you have a high income, high expenses, or a job with a high level of risk, you may want to aim for 9 months of take-home pay in savings. This can provide a safety net for a longer period of unemployment, a major illness, or other unforeseen circumstances.
The « 3-6-9 rule » can be a helpful guideline for determining how much you should save for emergencies and unexpected expenses. By following these guidelines, you can create a safety net that can help you weather financial storms and achieve your long-term goals.
References for What is the 3 6 9 rule of saving?
- The Truth About the 3-6-9 Month Rule
- The 3-6-9 Month Rule for Emergency Funds
- How Much Should You Have in Your Emergency Fund?
- Emergency Fund
- How Much Should I Have in My Emergency Fund?
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