How Much $$ Do You Really Need to Save?

woman looking at jar with money



By Caitlin Ultimo for Ideas That Spark

What does your dream future entail? A fabulous jet-set life? Or more like a quiet cottage by the sea? Either way, you might have a general idea of how much you’ll need to make it happen. But the reality is, when it comes to these things, our calculations can often be way off.

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Case in point: When I think of my own future, I envision two kids, a townhouse in Brooklyn, N.Y., and me sitting with my laptop at home writing articles for my editor. Nice and simple, right? To find out whether my own aspirations were realistic or far off, I decided to take a closer look.

Remember the childhood game MASH, intended to predict how many cars, kids and what kinds of home we’d have in the future? This lifestyle spending analysis calculator takes into account similar principles. But instead of choosing cars and crushes, you check off how much money you want to contribute to your children’s education and whether you’ll financially support your parents once they retire. In the end, the calculator lets you know how much your lifestyle will cost you in the long run — and what you need to make annually to accomplish that.

My verdict: I have the spending habits and desires of an average American. And what will that cost me? A whopping $3,265,000 when all is said and done. In order to achieve my dream — complete with townhouse, kids and yearly getaways — my annual household income will need to hit $81,625 a year.

I may not be at that number just yet, but it was a nice feeling to see that it was an attainable goal. Suddenly my dream life didn’t seem as hazy, and my desire to save a bit less flappable.

So try the tool yourself tonight, and you might be surprised by what you find. Although the calculation isn’t an exact science, having a concrete number in mind helps you stick to your budget. Now, when I see a dress on sale, I resist making the impulse purchase — and think about the future.

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How Much $$ Do You Really Need to Save?
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