Maximizing Savings: Avoiding Common Mistakes and Making Your Money Work Harder

Experts recommend having at least three to six months' worth of expenses saved in a general savings account as an emergency fund. The amount can vary depending on personal circumstances such as income volatility and dependents. Once the emergency fund is fully funded, extra cash can be allocated towards retirement accounts, investment portfolios, and other long-term goals. Financial professionals often recommend following the 50/30/20 rule, where 50% of income goes towards needs, 30% towards wants, and 20% towards debt repayment, savings, or investments. High-yield savings accounts are recommended for emergency funds, while retirement savings can be directed towards 401(k)s, employer-sponsored plans, or IRAs. The right amount of savings is subjective and depends on individual comfort levels and goals, but consulting a financial professional can help determine the best strategy.