How much should I save each month? (2024)

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  • Everyone has different savings goals and financial obligations, so save what you can monthly.
  • Budgeting strategies and setting goals can help dictate monthly savings contributions.
  • Savings accounts are the best places to keep money for short-term goals or emergencies.

One way to save money fast is to examine your budget and see if you can regularly set aside money toward your savings.

But is there a way to figure out exactly how much you should save each month? We'll explain how to use budgeting strategies and goal setting to determine how much to save each month, plus where to keep your money depending on your goals.

What is a good amount to save each month?

Around 20% of your income (after taxes) is a good amount to save each month, according to the 50-30-20 budget and 70-20-10 budget. These budgeting strategies may be helpful if you're looking for guidelines on spending and saving money.

With the 50-30-20 budget, you'll split income into three categories: 50% will go toward things you need, 30% to things you want, and 20% for savings and debt repayment. Meanwhile, if you use the 70-20-10 budget, 70% of your income is set aside for wants and needs, 20% goes to savings and investments, and 10% is for debt repayments or donations.

Everybody's ability to save differs, though, points out Patrina Dixon, CFEI, RFC, founder, and CEO of It'$ My Money. If you can't save 20% of your net income, Dixon recommends simply saving what you can.

"Start small and increase as you go along according to your budget. 'Small' can be as low as $20," says Dixon.

Once you establish a budget, Dixon says to look for areas where you can decrease your spending. Over time, you can may find that you can save more each month — going from $20 to $30, and so forth.

More ways to grow your savings monthly

In addition to the 50-30-20 budget and 70-20-10 budget, there are other budgeting methods you can use to help grow your savings. You can implement one of the following budgeting strategies if you're looking for more flexible savings options that don't specify a monthly savings percentage.

  • Pay-yourself-first method: This strategy is often referred to as reverse budgeting because it prioritizes saving goals. At the beginning of each paycheck, you'll automatically contribute some money to your savings. Then the remainder of your paycheck can be used for your monthly expenses.
  • Envelope method: With this method, you create a budget and set aside specific amounts of cash for each category. You'll put the cash in an envelope and use it for your monthly expenses. If you run out of money for a specific category, you'll have to wait until the next month to spend more. But if there's money left over, it can stay in your envelope for future use.
  • Zero-sum budget: The zero-sum budget assigns a clear purpose to every dollar you earn. This strategy is similar to the envelope method, but you don't need to keep your money in cash.

While budgeting may come across as restrictive to some, Dixon encourages people to take on a different mindset.

"I encourage people to look at it as not restrictive, but empowering. You're the one who's set the dollar amount. When the money starts to go down, you then have choices you make," says Dixon. "That's what I love about budgeting. You own it, you decide it, and then you have the ability to modify it."

What should I be saving money for?

Experts recommend having three to six months' worth of expenses saved for emergencies. By establishing an emergency fund, you'll have some room to breathe if an unpredictable situation happens, like if your car breaks down or you lose your job.

You should also aim to have at least one year of your salary saved for retirement by age 30 and 10 times your salary saved by age 67, according to Fidelity Investments.

You also might consider saving money for things you're passionate about or that can improve your way of life. It's beneficial to set a clear purpose when creating a savings goal, so you can follow through and achieve your goals.

Where should I be saving money?

A high-yield savings account is a good place to save money for short-term savings goals or an emergency fund because it allows you to earn interest but still have access to your money. The best high-yield savings accounts pay well above average savings accounts at national brick-and-mortar banks, so you'll likely earn more interest on your savings if you're comfortable with an online-only banking experience.

If you don't need immediate access to your money, a certificate of deposit is another option to keep money for savings goals. CDs allow you to earn the same interest rate for a specific timeframe. However, you generally won't be able to make withdrawals from the account without paying a penalty.

If you're saving money for retirement or have a long-term goal, experts recommend investing instead of saving. While investing holds more risk, you could get greater returns than a savings account. You could open a retirement account or brokerage account if you're interested in investing.

Monthly saving FAQS

How much should one person save per month?

The median post-tax income for a one-person household in the U.S. was $39,630 in 2022, according to data from the United States Census Bureau. A person with that income would need to save around $660.50 per month if they are using the 50-30-20 budget rule. The amount each person should save per month will likely depend on their savings goals and current budget, though.

Is saving $1,500 a month good?

Saving $1,500 per month may be a good amount if it's feasible. In general, save as much as you can to reach your goals, whether that's $50 or $1,500. You could speak with a certified financial planner to help develop a plan for your finances if you aren't sure how much money to save regularly.

How much do most people have in savings?

The average American savings balance in bank accounts is $62,410, according to the Federal Reserve's 2022 Survey of Consumer Finances.

How much should I save each month? (1)

Sophia Acevedo

Banking Editor

Sophia Acevedo is a banking editor at Business Insider. She has spent three years as a personal finance journalist and is an expert across numerous banking topics.ExperienceSophia leads Personal Finance Insider's banking coverage, including reviews, guides, reference articles, and news. She edits and updates articles about banks, checking and savings accounts, CD rates, and budgeting and saving. She is highly knowledgeable about long-term trends in rates and offers at banks across the U.S.Before joining Business Insider, Sophia worked as a journalist at her college newspaper and was a freelance writer. She has spent seven years writing and editing as a journalist.Sophia was nominated for an Axel Springer Award for Change in 2023 for her coverage of ABLE accounts, tax-free savings accounts for people with disabilities. She was also a winner of a 2018 California Journalism Awards Campus Contest for her photography.She loves helping people find the best solutions for their unique needs and hopes that more people will find the tools to solve their financial problems. She’s inspired by stories of everyday people adapting to their financial circumstances and overcoming their fears around money.ExpertiseSophia's expertise includes:

  • Bank accounts
  • Savings and CD rate trends
  • Budgeting
  • Saving
  • How banks operate

EducationSophia graduated from California State University Fullerton with a degree in journalism and a minor in political science.She is an avid reader across a variety of genres, and she started running in 2021. She ran in the 2024 Los Angeles Marathon.

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How much should I save each month? (2024)

FAQs

How much should I save each month? ›

For many people, the 50/30/20 rule is a great way to split up monthly income. This budgeting rule states that you should allocate 50 percent of your monthly income for essentials (such as housing, groceries and gas), 30 percent for wants and 20 percent for savings.

Is saving $500 a month good? ›

The short answer to what happens if you invest $500 a month is that you'll almost certainly build wealth over time. In fact, if you keep investing that $500 every month for 40 years, you could become a millionaire. More than a millionaire, in fact.

Is saving $200 a month good? ›

Saving just $200 a month may not sound like a big deal, but that's $2,400 yearly. This extra money can go a long way toward your other financial goals, like saving money or investing. Also, aiming at a “reachable” goal, like saving $200 a month, could eventually save much more each month once you get the hang of it.

Is saving $600 a month good? ›

But when it comes to what they need to be saving, it depends. So, if we're starting with a 30-year-old, they should be probably saving close to $580, $600, at least, a month. And that's if they're going to earn a high rate of return. So it depends on how aggressive and risky that they're looking to be.

Is saving $1000 a month good? ›

Saving $1,000 per month can be a good sign, as it means you're setting aside money for emergencies and long-term goals. However, if you're ignoring high-interest debt to meet your savings goals, you might want to switch gears and focus on paying off debt first.

Is saving $300 a month good? ›

Key Points. Investing in growth funds can help you outperform the S&P 500 in the long run. Putting aside $300 per month by the age of 39 could set you up to be a millionaire by the time you retire. Investing in exchange-traded funds is a good way to minimize risk and simplify your overall investing strategy.

Is $5,000 a month enough? ›

Outside the most expensive parts of the United States, $5,000 per month is typically enough to cover rent or mortgage payments and other lifestyle expenses if you're mindful of your budget.

How can I save $5,000 in 3 months? ›

Monthly savings: Saving $5,000 in three months equals a monthly savings of approximately $1,667. Weekly savings: Dividing $5,000 by 13 weeks gives a weekly savings goal of around $385. Daily savings: To reach this goal, you would need to save about $55 per day for the next three months.

Is saving $50 a week good? ›

If you invest $50 per week, that's the equivalent of $200 per month, or approximately $2,400 per year. Over a 30-year period, that would result in more than $72,000 in savings. It's a good chunk of savings, but it isn't a life-changing amount. This is where the power of compounding comes into play.

Is saving $20 a week good? ›

Small amounts will add up over time and compounding interest will help your money grow. $20 per week may not seem like much, but it's more than $1,000 per year. Saving this much year after year can make a substantial difference as it can help keep your financial goal on your mind and keep you motivated.

How much do rich people save per month? ›

Estimated saving rates range from less than 5 percent for the bottom quintile of the income distribution to more than 40 percent of income for the top 5 percent.

What if I save $10,000 a month? ›

With a simple pun in normal investment strategy an investor can become a crorepati in 15 years saving ₹10,000 per month in mutual funds SIP (Systematic Investment Plan).

Is 3k a month good for one person? ›

For some people, $3,000 a month may be more than enough to cover their living expenses and even have some left over for savings and leisure activities. However, for others living in cities with a high cost of living, $3,000 a month may not be enough to cover basic expenses like rent, utilities, and groceries.

Is 100k too much in savings? ›

A $100,000 savings account balance is fine if it aligns with your goals. But it could be a red flag if you don't need that much money there. Some people put all their extra money in their savings accounts because they feel as if it's the safest option. They'd rather do that than take on any risk.

How much of my paycheck should I save? ›

Everyone's incomes and responsibilities are different, after all. But, in general, finance experts recommend that you should aim to save 20% of your paycheck each month.

How much will I have if I save $100 a month for 30 years? ›

Of course, your ending balance will look different if you wait to start building a retirement nest egg and therefore don't have 40 years to save that $100 every month. If you save $100 a month for 30 years, your ending balance may only come to about $197,000, assuming that same 10% return.

How did I stop living paycheck to paycheck and saved my first $1000? ›

7 Steps to Stop Living Paycheck to Paycheck
  1. Start by Creating a Budget. If you don't already have a budget, now is the perfect time to create one! ...
  2. Cut Expenses and Increase Income. ...
  3. Build an Emergency Fund. ...
  4. Stop Accruing Debt. ...
  5. Open a High-Yield Savings Account. ...
  6. Join a Credit Union. ...
  7. Use Free Financial Wellness Resources.

How much savings should I have at 30? ›

If you're looking for a ballpark figure, Taylor Kovar, certified financial planner and CEO of Kovar Wealth Management says, “By age 30, a good rule of thumb is to aim to have saved the equivalent of your annual salary. Let's say you're earning $50,000 a year. By 30, it would be beneficial to have $50,000 saved.

How much should a 23 year old have saved? ›

Aim to have three to six months' worth of expenses set aside. To figure out how much you should have saved for emergencies, simply multiply the amount of money you spend each month on expenses by either three or six months to get your target goal amount.

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