Money

Here's how much money you should save in your 20s

Your 20s are often full of firsts: First full-time job, first apartment, first time handling your own finances.

But while it's tempting to reward yourself for your successful adulting by splurging on dinners out or trips abroad, it's important to use your 20s to set up a solid financial foundation for yourself as well.

Even in your 20s, experts recommend saving 25 percent of your overall gross pay, Kimmie Greene, money expert at Intuit and spokeswoman for Mint.com, tells CNBC Make It.

At face value, that's a lot. But let's break it down: That 25 percent not only includes direct contributions to a 401(k) or Roth IRA, but any company match you receive and any cash savings, including an emergency fund. Greene says you can also count any funds you're putting toward credit card debt and student loans in that percentage as well.

Lena Dunham in "Girls" on HBO.
Mark Schafer | HBO
Lena Dunham in "Girls" on HBO.

If you flip the 25 percent savings rule, it dictates that you shouldn't be spending more than 75 percent of your income, total, on necessities like rent, utilities and your cell phone bill, as well as discretionary expenses such as travel and dining out.

To successfully save in your 20s, the dollar amount isn't the only thing that matters, however. It's equally important to build the habit of saving a portion of your income every month, even if that number starts small, so you can gradually begin to save more.

"The idea is to have a plan, and then to work that plan so that it takes the anxiety and stress out, not that it makes you feel worse about the situation," Greene says.

According to Greene, the biggest thing 20-somethings can control are their lifestyle choices. Are you living in New York or Los Angeles, or somewhere more affordable like the South or the Midwest? What kind of car do you drive? Do you have your own apartment or do you share with roommates?

You might have to make some tough choices in order to prioritize saving alongside the other things that are important to you.

To some 20-somethings, that might feel easily doable. To others, it's daunting. But even if you aren't able to hit 25 percent, or even 15 percent, start where you can. "If you don't feel like it's feasible this year, it really comes down to feeling okay being vulnerable, not getting all the way there and having a plan," Greene says.

Greene recommends using an application, such as Digit, to automatically push money into savings each month. You can then set it to auto-increase your monthly savings by 2-to-5 percent each year. Automation works because, if you never see the money in your account, you won't miss it.

Periodically increasing your contributions allows you to save more over time while gradually getting used to the dip in your checking account.

Bottom line: Make saving a priority in your 20s, even if it's only 2 or 3 percent of your monthly income. Creating that financial cushion will cover you in the wake of an emergency and allow you to take chances on riskier investments. After all, your 20s are a time to experiment.

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