How much of your income should you be saving? The number varies based on your personal circumstances, but here's a general rule of thumb: Save 20% of your pre-tax income . That percentage may seem lofty, but it's possible. Here's how. 

 When I ask friends, family, and clients why they don't save enough money, I hear one reason most of all: "I don't make enough money." As a result, saving becomes a low priority until their next pay raise. When they do get more money, they often spend it on an upgrade in lifestyle, instead of saving more. Because of this, the majority of Americans are ill-prepared for financial goals like retirement.  According to a recent survey of 2,000 Americans by GOBankingRates, 42 percent have less than $10,000 saved for retirement -- and 13.7 percent have nothing saved for retirement at all . 

Canvas bag filled with one hundred dollar bills.

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Blame high expenses

In my experience as a financial advisor, high expenses most often kept people from saving enough.  In some cases, they didn't make enough money, but usually, they had no clue how much money they were spending on things they really didn't need.

You have more control over your expenses than you think -- but first, you'll need to figure out how much you spend, and on what. Research commissioned by Ladder and conducted by OnePoll showed that the average American spends $18,000 a year on nonessentials, or almost $1,500 a month. Knowing how much you spend on big bills like your rent/mortgage or car expenses is easy, but smaller purchases often escape the budgeting process. To get a better idea of what you're spending, keep a list of all of your expenses, from the very biggest bill down to the smallest purchase, for at least a month. Use this list to determine which of your purchases you actually need (essentials), and which ones you simply want (nonessentials).  Then figure out how much of your spending nonessential purchases consume. 

Cutting your expenses

If nonessential expenses make up a significant portion of your spending, you're in luck! They're the easiest costs to  reduce and redirect toward savings.  You don't have to give up everything you enjoy, but you will need to cut back. Small changes such as bringing your lunch to work half of the week, canceling subscription services that you don't use often, or using rideshares fewer days a week  can help you achieve this goal.

 If your essential expenses make up the majority of your budget, you'll need to pursue a different course. Approximately 50% of your income should go toward fixed expenses -- but these bills are vital for your survival. Instead, start by determining whether you're living above your means, and how you can lower those expenses over time. If your rent is too expensive, think about moving once your lease is done. If you have a mortgage, consider refinancing at a lower interest rate to reduce that payment.

Making these changes will take longer than eliminating nonessential expenses, but it'll still move you in the right direction. If eliminating your expenses looks impossible, don't lose hope. Work on keeping a lid on any current expenses that are within your control, and direct money from future income increases or one-time payments like a tax refund entirely to savings. 

Investing your savings

After getting a firm grip on your expenses and starting to save more, you can focus on channeling those savings into investing to further grow your wealth. Before you start, make sure you have an adequate emergency fund -- enough to cover at least 6 months of your expenses. After that, you can start to invest the additional money you're saving each month.

Savings accounts won't earn you much interest -- less than 1% in most cases. But investing in a large-cap stock ETF over the last 10 years would've earned you an average annual return of 13.84%. This higher rate of return will come with  greater risk and more stock market fluctuations, so you'll want to invest money that you won't need anytime soon. You'll also want to make sure that you diversify your investments to spread out that risk.  An index fund or ETF that is already diversified can offer you an easy, relatively low-maintenance way to invest.

 You have every right to spend your money on things you enjoy. But when you have to sacrifice saving to do so, you need to change your habits. Prioritizing saving will help you accomplish important goals like retiring successfully or sending kids to school without taking out debt. Regularly saving 20% of your annual income might take time, but these changes will get you closer to that goal.