Fundamentals may help you grow savings over time.

Personal wealth icon
Personal wealth icon

Don't leave money on the table.

Contribute to your company’s retirement plan and other tax-advantaged accounts up to the maximum match.

What you can do now: Use our Take-Home Pay Calculator to see how retirement plan contributions might affect your take-home pay.

credit card icons
credit card icons

Stop giving so much to credit card companies.

Credit can be a powerful tool if it's used wisely. But if it gets out of hand, maintaining high balances on your credit cards could cost you hundreds of dollars in interest each year. Example: The staggering cost of credit card debt. If you buy a $3,000 TV on a credit card with an annual interest rate of 14%, make a $100 payment each month, and don't use the card for additional purchases, it will take over three years to pay off your balance. And you will end up paying more than $700 in interest—almost a quarter of the original purchase amount.

What you can do now: Use our Debt Calculator to see what your debt is really costing you. Try to negotiate a lower interest rate with your credit card companies. Avoid making only the minimum payment on your balance. Pay as much as you can afford each month to avoid high interest rate charges. If you have more than one credit card, pay off the card with the highest interest rate first.

savings icon
savings icon

Save money for emergencies.

Build an emergency fund to cover at least three months' worth of living expenses to help avoid borrowing from credit cards or tapping into retirement funds. Having emergency cash on hand also helps you avoid selling long-term investments at inopportune times in the market.

What you can do now: Make a list of your essential expenses to see how much you need to save. There's no need to include nonessential items like cable TV or entertainment, since this emergency fund is meant to cover the bare necessities. Decide where to keep your funds. It's preferable to keep them somewhere relatively liquid.

Planning icon
Planning icon

Maximize savings to tax-advantaged retirement and other accounts.

Maximize your savings by contributing to your employer-sponsored retirement plan to get the full match amount and up to the annual contribution limit, if possible. If you can afford to save more, consider opening and funding an IRA or if you're eligible, contributing to a tax-advantaged Health Savings Account.

What you can do now: Use our comprehensive Retirement Planning Calculator for a detailed analysis of where you are in relation to your savings goals, plus tips and options to keep making progress.


Consider these goals to help prioritize your savings.

The savings fundamentals above are essential for everyone. Once you've tackled those, consider these additional savings goals in any order. Pick and choose your goals according to your personal financial priorities.

  • Education icon

    Save for a child's education.

    Saving for retirement should still be your top priority, but it's possible to save for a child's education as well, particularly since there may be tax benefits. Any amount saved for education is less you may need to borrow.

    What you can do now: Clarify your college savings goal with our College Savings Calculator.

  • Home icon

    Save for the down payment on a home.

    To estimate what you'll need for a down payment, get an idea of the purchase price and what type of monthly mortgage payments you can afford. The general rule of thumb is to spend no more than 28% of your gross income on principal, interest, property taxes, and insurance.

    What you can do now: Use our Mortgage Affordability Calculator to help estimate how much house you can afford to buy.

  • Tap to pay icon

    Pay down other debt.

    Once you've taken care of your other savings priorities, we recommend that you start paying down high-cost debt, even if it's deductible. Unless you can refinance at a lower rate, this includes tax-deductible debt such as mortgages, home equity lines of credit (HELOCs), and student loans.

  • Icon mobile investing

    Keep investing.

    To stay ahead of inflation, your money needs to earn more than many traditional savings accounts pay. Our recommendation for long-term investors is to invest early and often—regardless of what's happening in the market.

Want more information?

Whether you need help planning for retirement, creating a savings plan, or managing your money, visit the Calculators & Resources section for assistance. 

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Schwab Savings Fundamentals™ are provided by Charles Schwab & Co., Inc.