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The No. 1 2022 money resolution is to save more: Calculate how much you need to save per paycheck to reach your goals

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Key Points
  • The No. 1 financial resolution for 2022 is to save more money, according to Fidelity Investment's recent 2022 New Year's Financial Resolutions study.
  • By automating his savings, Daniel Stadlin, a 31-year-old account executive from Philadelphia, has saved $10,000 over the last year.
  • "Automating your savings is one of the easiest and smartest things to do when saving for your future," says Winnie Sun, co-founder of Sun Group Wealth Partners in Irvine, California.

The No. 1 financial resolution for 2022 is to save more money, according to Fidelity Investment's recent 2022 New Year's Financial Resolutions study. Around 43% of the 3,000 adults Fidelity surveyed said saving money was their top priority for the new year, followed by paying down debt (41%) and spending less money (31%).

To save more, it's useful to understand what your financial goals are and how you can get there from where you are now. A simple calculator can help.

Calculate how much you need to save per paycheck to meet your goals

Use Grow's calculator to figure out how much you'd need to automatically set aside each paycheck to reach your savings goal.

How automating and paying yourself first can help you save big

"Automating your savings is one of the easiest and smartest things to do when saving for your future," says Winnie Sun, co-founder of Sun Group Wealth Partners in Irvine, California.

Automatic savings means you've scheduled a fixed amount of money to be deducted from your paycheck on a specific date. That money is then transferred to a savings or investment account automatically.

Sun recommends putting aside "at least 20% of each paycheck towards your savings, your investing, your short and long-term financial goals. Automating this is the best way to ensure that you reach that savings goal each and every year," she says.

"Unless you're a financial advisor like me, there's a good chance that you'd prefer to focus on your work, your hobbies, your friends, and family over having to worry about whether or not you've remembered to save," Sun says.

To figure out how much you can save, "I recommend going through your last 3 months of expenses," Sun says. "We have our clients download a free worksheet at MyBudgetWorksheet.com. Then, once you know how much you spend, you can deduct that from your take-home pay each month and that will give you an idea of how much money you have left each month."

Ultimately, "the goal is 20% or more of your take-home pay for your 'future you,' but even if you can't reach that number, that's a goal you'll want to try to work on," Sun says.

"The Roth IRA is probably my favorite account for long-term 'you' money," Sun says. "This account has so many wonderful benefits and can help you really jump-start your retirement savings." Some of those Roth benefits include long-term tax-free growth if you stay invested until age 59.5 and if the account has been opened for 5 years or more. It also can provide liquidity in case of an emergency because contributions can be taken out at any time without penalty.

Daniel Stadlin of Philadelphia, PA.
Courtesy Daniel Stadlin

Daniel Stadlin, a 31-year-old account executive from Philadelphia, has been automating his savings for the last seven years. "Over the last year, I've saved around $10,000 in a savings account to support my short-term goals, or to pay for the things I want to do this year, whether it's buying a dog, or going to Europe over the summer," Stadlin says. That doesn't include the $5,000 Stadlin has saved for an emergency, or his investments for his long-term goals, he says.

When Stadlin gets his paycheck, the money is automatically set aside into different "buckets," he says. "Money goes into my 401(k) at a payroll level, then I get my paycheck. I don't contribute to the first bucket, which would be my emergency savings account, because it's full. Next, I pay myself first," he says.

For Stadlin, paying himself first means putting money in a brokerage account to invest for future goals, like buying a house.

The beauty of automated savings is that you don't have to think about it, Stadlin says. "The link between having to remind yourself to manually do something makes it a lot less likely that you're going to do it. Whereas if you don't see it, feel it, or have to remind yourself to do it, it gets done, and overtime that will compound and benefit in the long term."

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