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How to set and prioritize savings goals

Kelly Kowalski, Cliff Noreen, and Bronwyn Shinnick

Posted on December 27, 2023

Our executives and experts team up to write educational articles, covering a variety of financial topics such as life planning, college savings, and retirement.
Set your savings goals
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Suggest an initial savings goal that is a common target for many people.

Note that having solid savings helps in emergency as well as opportunistic situations.

Review some good savings habits that help an overall plan succeed.

Saving money is a time-tested way to improve your financial situation over time. It can give you more peace of mind today, and get you started down the road toward a comfortable retirement, a college education, or family vacation.

Of course, a savings plan should be part of an overall money management strategy that takes into account the demands of debt, income constraints, and retirement needs.

Consider a goal: 10 percent?

What is a good savings goal? One rule of thumb is to save 10 percent of your net income each year. Of course, some people may want to save more or less, depending on their circumstances.

  • High-income earners may want to save more in order to ensure themselves of maintaining their current lifestyle.
  • Those with more pressing financial demands, like certain debt obligations, may have to save less, at least until circumstances can change.

Ten percent is a common, middle-of-the-road target that makes sense for many people, at least as a starting point.

Regardless of the level, setting a target savings rate makes financial sense for lots of reasons. But here are three in particular:

  • Helps you create an emergency fund.
  • Can provide funding for opportunities that may arise.
  • Gets you into the habit of long-term saving.

Indeed, a targeted savings rate is key to developing an overall financial plan, like the 5-10-15-20 strategy for financial goal setting. This is where your savings goal can fit with other goals, including:

Establishing a savings plan is a fundamental part of the strategy.

Emergency fund

An emergency fund is an amount of money set aside to buffer you against financial surprises. Whether it is a job loss, health emergency, or car or home repair, an emergency fund can help you cover unexpected costs and not interfere with your other financial goals, or worse – having to take on unwanted debt.

Most financial experts suggest targeting an emergency fund equal to about six months of salary. Personal circumstances can differ, however, and affect what would make an appropriate level of saving for a particular individual. (Related: Emergency fund basics)


We’ve all been in this situation before: something great presents itself, but we don’t have the “cash on hand” to take advantage of it. Be it a business opportunity, an extended vacation, or a new, low price on something we’ve always wanted, the opportunity often gets missed for a lack of funds. (Related: Starting a business)

Money set aside through regular savings can be used for just these opportunities; especially those that can help you reach your financial goals.

Good money saving habits

Regularly saving money helps you build good financial habits. And saving and budgeting tends to lead to better expense management.

For some people, the trick is to never have the money in hand to spend in the first place. To this end, many people set up direct deposit with their employer to have a certain amount of money directed to a separate savings account automatically each pay period.

Financial experts also advise people to look periodically at their expenses to see if there are potential savings opportunities. Some expenses can be minimized, or even eliminated, and redirected toward savings. (Related: How to re-evaluate expenses)

Whether your savings goals are big – college tuition, a new home, a comfortable retirement – or more modest goals – a family vacation, or a new car – building good financial habits now can help you reach both your short- and long-term goals.

Other steps to help money management include:

  • Organizing financial information and records.
  • Establishing a household budget.
  • Analyzing spending on a regular basis, and reviewing monthly bills for accuracy.
  • Continuing education about finances.

Track and share

To save 10 percent a year, you need to save about 10 percent each month on average. To make sure you stay on track, check your progress every month to ensure you are sticking to your plan. Keeping close tabs on your monthly savings will also help you identify and solve for any problems that may arise.

Saving money is a long-term commitment, and one that is often best realized through confidence gained by small achievements.

And that’s where mutual support can come in. As you hit certain savings goals, you may want to share the accomplishment with friends and family. How much specific information to share is, of course, up to you. But for many, support, encouragement, and reassurance from loved ones can go a long way in helping to reach financial goals.

For more advice and information on saving, as well as developing a broader financial strategy to meet long-term financial goals, many people opt to consult a financial professional.

Discover more from MassMutual:

3 ways to jump-start your financial wellness plan

Managing debt in a balanced way

Achieving financial well-being through financial wellness

This article was originally published in December 2016. It has been updated.


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The information provided is not written or intended as specific tax or legal advice. MassMutual, its employees and representatives are not authorized to give tax or legal advice. You are encouraged to seek advice from your own tax or legal counsel. Opinions expressed by those interviewed are their own and do not necessarily represent the views of Massachusetts Mutual Life Insurance Company.