As an editor at CNNMoney, Walter Updegrave has answered hundreds, if not thousands, of reader questions on everything from retirement to advice on saving money. Lionel from San Diego wrote in with a question that all of us have:

What percentage of income should someone save in order to be considered financially responsible? I’m wary of spending now because of the bad economy, but I don’t know how much I should be saving on a monthly basis.

This is a great question, and something we’ve all wrestled with at some point. Ultimately, I decided to embrace Elizabeth Warren’s balanced money formula, which says to set aside at least 20% of after-tax income for Savings, keep Needs below 50%, and use the rest for Wants:

Advice on saving money: Elizabeth Warren's "Balanced Money Formula"

Advice on saving money: Elizabeth Warren’s “Balanced Money Formula”


Americans aren’t the best savers

In other words, my target savings rate is 20% of my income. My wife tries to save 25% of her income. But as Updegrave notes, Americans are not the best savers. According to the National Foundation for Credit Counseling’s 2016 Financial Literacy Survey, “When it comes to retirement savings, about 1 in 4 U.S. adults (26%) do not save any portion of their household’s annual income for retirement, which, while a significant decrease from 2015 (29%) is still a large percent not funding this important life event.”

Best advice on saving money: Do what works for you

The best answer Updegrave or any financial expert can give is: Do what works for your financial situation. Each of us is in a different situation, and while it might be financially responsible for me to save 20% of my income, for you that number might only be 5%.

Updegrave says that it’s not important what percentage of your income you save, but that you develop the habit. Build an emergency fund. Develop a retirement savings regimen. When you’ve done these two things, look for additional ways to save. Most of all, he says, don’t make excuses. We all have things we’d rather spend our money on; if your goal is to be financially responsible, make saving a priority.