All your embarrassing questions about saving money, answered

Short answer: As much as you can.

At least 10% of your income, if you can afford it, is a good place to start. For an emergency fund, that translates to saving at least three months of expenses.

To successfully save money, your best bet is to create a budget or track your spending. If you're just starting out, don't stress over your first month's budget. The amount you spent may feel overwhelming, but looking at your past purchases will help you see where you can cut back.

Short answer: A regular savings account is best for emergency savings.

If you don't have a savings account, the best time to start one is right now. When starting a savings account, make sure it is insured and certified by the FDIC. If you're looking to create an emergency fund, Faust suggests a "plain old vanilla savings account," meaning one that earns you interest and does not have fees or minimum balances.

If you're saving for a big purchase or expense — like a house or a wedding — you may consider a high-yield savings account. It offers higher interest rates than a regular savings account but can have different requirements and restrictions, like minimum balances and deposit amounts.

Short answer: Open a credit card and pay your balance in full every month.

Having a credit card is how you start building credit. To have good credit, you want to pay your monthly balance in full — if you only pay the minimum, the interest will snowball and you'll end up owing more money over time.

Credit is what banks look at to determine your trustworthiness for paying back a loan, like one you take out for a mortgage on a house. Your credit score can also be used to determine insurance rates, and if you don't pay your bill on time or in full, your credit score will reflect that.

Short answer: You save money in order to invest it.

While high-yield savings accounts can earn you interest, you're going to get the best returns when you invest. Once you have saved up an emergency fund, you can start investing any excess savings.

When you invest money, your money will likely earn a greater return than the interest rate it earns in a savings account. If you can afford some risk and wait out the reward, investing in the stock market — most financial planners recommend low-cost index funds for the inexperienced — will almost always have long-term benefits. While there will be ups and downs, you'll walk away with more money than you had at the start.

Short answer: A retirement savings account run through your employer.

A 401(k) is an account offered by employers to allow employees to save for retirement by contributing a portion of their pre-tax paycheck into an account that has investment options, Faust said. As you make contributions and invest your money, it should grow overtime. Some employers also offer to match contributions made into a 401(k), so if you invest $100 a month, an employer will also contribute $100.

If your employer doesn't offer a 401(k), you still have options. Faust suggests an IRA (individual retirement account) or Roth IRA, depending on your tax situation. If you're not sure what tax bracket you fall into, visit IRS.gov.