how much money is "enough money"?

We get this question ALL. THE. TIME.

How much money is actually considered "enough" money?

Like, in general? And emergency expenses? How about investing? Or future retirement? One million? A billion? A MILLION BILLION?! (lol, no.)

Today, we’re giving you detailed answers for all of these categories – including the “gold standard” for each, how to calculate what’s right for you, and give you a simple investment tip to help you build a solid foundation to reach all your money goals.

Warning: some of these numbers left us mind blown.

👀 8min read

investment tips

📸: Death to Stock

How much money do I really need, in general?

There’s an interesting study that looks at the relationship between money and happiness, and how much money is enough to live happily.

Honestly, we were surprised with their findings:

Income between $60,000 to $75,000 is ideal for emotional well-being (aka, you can live well and cover most basic needs, like food on the table)
Income at $95,000 is optimal for life evaluation (aka happiness, zen, and rainbows)
Income higher than $95,000 sees a decrease in life evaluation (aka extra money doesn’t buy happiness, after all)

(Source: Simple Money Habits, Nature Research Journal)

The study looked at data from around the world, not just the US.

Still, these numbers made us pause.

It’s really hard to pay the bills even with a $60k salary. Add cost of living, plus taxes, and there’s barely anything left over at the end of the month, since the cost of things increased so much – but wages haven't kept up.

Plus, it’s a little bonkers to think you won’t be happy unless you’re making $95k, right?

There’s no good one-size-fits-all answer here.

So, instead of looking outwards – we decided on a different approach.

The “right” amount of money for day-to-day life is…

However much you need to cover:

your living expenses,
plus a savings cushion for emergencies & retirement, and
“fun money” for fun things.

Most traditional budgets forget the fun part, but we consider it as important as investing and building your future nest egg.

Think travel, birthday celebrations, and that extra shot of vanilla in your morning latte. Gotta live your life, right?!

Curious to see your time until debt free and protentional future retirement nest egg? Take 3 min to complete Penny’s free money quiz. We think this get the brain rolling!

How much money do I need for emergencies?

Again, this will depend on your expenses month-to-month.

The short answer?

Set aside 6-12 months of emergency savings.

You can dial this number up or down based on your bigger life goals, but this pretty much covers everything from fixing a blown tire, to quitting your job with a hefty financial safety net so you can job search with ease.

Ways to think about it: if your risk of losing your job is low, start with 6 months. If it's high, like being a business owner, give yourself more wiggle room.

Our emergency savings course will walk you through it, and do the math for ya.

Alright, next: time to dive into your retirement nest egg!

How much money do I need to retire?

Some say $700k is enough to retire.

Some say $1 million.

Well, we think the average is more like $1.5 million.

Yup.

One and a half freakin million.

This probably feels impossible, but we promise you it’s not. There’s a way to get there, even with a limited income.

Before we get into numbers and how to’s – keep in mind:

This math assumes you’ll retire at 65 years old, and live until 81 years old (the average age for women). Ample time to start early, and enjoy life post-retirement.
In order to know how much you actually need to save each month, you should factor in your Social Security allowance (aka how the US government helps you save for retirement).

We’ll tell you more about how to find out your Social Security stipend after this next section, so just scroll past it if you can’t wait to learn more.

How can I save $1.5 million for retirement?

Ok, you might not need $1.5m per se.

It's allll about how much you plan on spending when you’re older.

Obviously, this is VERY hard to estimate. It’ll depend on your specific financial situation, goals, and background.

But in general, our goal for you is to live FREE. Worry-free. Stress-free. Financially-free. You get the picture. ;)

So, we outlined a few estimates below for varied lifestyles.

Based on what your current monthly expenses are today, this is what your estimated retirement money goal most likely should be:

IF you spend $2k a month > your retirement money goal = $720k
IF you spend $3.5k a month > your retirement money goal = $1.3m
IF you spend $5k a month > your retirement money goal = $1.8m
IF you spend $10k a month > your retirement money goal = $3.6m

When you apply this to your financial planning, think about how much you spend every month. No need to cut stuff out. If you’re somewhere in between, look for the next level up.

These numbers may seem daunting at first, but they’re realistic and 100% possible to achieve in this lifetime.

How?

1 word: investing.

How much money do I need to invest in stocks?

At this point, you might be saying, “but Penny, I got bills to pay! and I don’t even know how!”

Yes, we hear you!

Most women in the Penny community feel the same way when they first start, too.

But here’s where most people get it wrong: you think you need A TON of money to start saving or investing – nope!

You can start with $25.

That's it.

1 share of an investment stock is on average $25 to $100. You can set aside small amounts, a little bit at a time, and watch that money grow.

And the earlier you start, the better.

Because contrary to what most people think, the TIME your money spends invested and accruing interest has a bigger impact than the AMOUNT you save every month.

Start early, start small, and watch your money snowball in 20, 30, 50 years.

It really can be that simple.

Want to learn how to start? Join Penny! Or login to gain access to 18 bite-sized investing courses plus our net worth calculator. It's perfect for beginners and low risk investors. We'll walk you through from retirement, to ensuring your accounts are invested, to learning ways to invest and... DOING IT YOURSELF! YES YOU! In & Outside of retirement...you've got this.

How much money will I get from the government when I retire?

Like we said earlier, Social Security is how the US government helps you save for retirement.

This money is automatically taken out of every paycheck you get, and set aside for Future You.

So it’s important to factor it into your retirement savings plan when calculating how much you need to save for your future nest egg – and how much is truly “enough”.

Easiest way to find out:

Log into the Social Security website directly and see your estimated monthly payout when you retire. Cool, right?!

But if you don’t want to do this right now, that’s okay.

We give you the rough estimates below. ;)

If you worked for a company for most of your life…

Yay! You’ll get a big chunk of Social Security income!

Remember all those paychecks where it felt like TONS of cash was taken out? Yup, you get some of that cash back when you retire!

Here are ballpark numbers based on salary:

$60k average salary-- $2k per month at age 67 (great!)
$100k average salary-- $3k per month at age 67 (wahoo)
$200k average salary -- $5k per month at age 67 (damn!)

Since this process auto-magically happens for you, this means you can reduce the amount you need to save for your retirement every month. Woo!

OK, OK, so how much should I have?

We cover A LOT of ground in this post, so we’ll sum it up again for ya.

The ideal number is whatever you need to cover:

all your bills in the present
future expenses in retirement (minus what Social Security might give ya)
anything else, in case of emergencies

Including the fun stuff. Because that’s where life really happens.

This quote from a Penny member sums it up perfectly:

"I want to have enough to play the game. Because sadly, there is a game to be played and it’s happening whether you attend or not. If you choose to ignore the economical part of life, it’s okay. But know that might yield moments of unfun stress. Money has and will likely always be. There’s freedom in knowing how to keep your head above water."

And that’s really what it comes down to.

$60K, $1.5M, $3B – these are just numbers. They always will be.

The real question is: how much would you need to grow and thrive, with your unique lifestyle?

That’s your answer.

Ready to begin? Start with knowing your numbers. It all stems from there. Penny's Mini-budget calculator.

Want more money #inspo? Follow us on Insta** @startwithapenny**

Our goal is to provide easy and digestible financial education for women-first – so you can increase cash flow today, and retire with wealth tomorrow.