Money » Budgeting » How Much Should You Save Every Month?
Advertiser Disclosure

This website is an independent, advertising-supported comparison service. The product offers that appear on this site are from companies from which this website receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). This website does not include all card companies or all card offers available in the marketplace. This website may use other proprietary factors to impact card offer listings on the website such as consumer selection or the likelihood of the applicant’s credit approval.

This allows us to maintain a full-time, editorial staff and work with finance experts you know and trust. The compensation we receive from advertisers does not influence the recommendations or advice our editorial team provides in our articles or otherwise impacts any of the editorial content on The Smart Investor. While we work hard to provide accurate and up to date information that we think you will find relevant, The Smart Investor does not and cannot guarantee that any information provided is complete and makes no representations or warranties in connection thereto, nor to the accuracy or applicability thereof.

Learn more about how we review products and read our advertiser disclosure for how we make money. All products are presented without warranty.

How Much Should You Save Every Month?

Saving money is something that most people do after they’ve paid off everything else. Instead of being the first thing - it’s actually the last. Is it the right strategy?
Baruch Mann (Silvermann)
Baruch Mann (Silvermann)
Baruch Mann (Silvermann) is an experienced analyst and founder of The Smart Investor. Above all, he is passionate about teaching people how to manage their money and helping millions on their journey to a better financial future.

You can trust the integrity of our unbiased, independent editorial staff. We may, however, receive compensation from the issuers of some products mentioned in this article. See how we make money.

Delta SkyMiles® Blue American Express
Delta SkyMiles® Blue American Express 2022 Review
Delta SkyMiles® Blue American Express
Delta SkyMiles® Blue American Express 2022 Review
Wells Fargo ReflectSM Card (1)
Wells Fargo Reflect℠ Card 2022 Review
Wells Fargo ReflectSM Card (1)
Wells Fargo Reflect℠ Card 2022 Review
AAdvantage® Executive World Elite Mastercard®
Citi / AAdvantage Executive World Elite Mastercard 2022 Review
AAdvantage® Executive World Elite Mastercard®
Citi / AAdvantage Executive World Elite Mastercard 2022 Review
United Quest℠ Card
United Quest℠ Card 2022 Review: Is It Worth It?
United Quest℠ Card
United Quest℠ Card 2022 Review: Is It Worth It?
JetBlue Plus
JetBlue Plus Card 2022 Review
JetBlue Plus
JetBlue Plus Card 2022 Review
Delta SkyMiles® Reserve American Express Card
Delta SkyMiles® Reserve American Express Card 2022 Review
Delta SkyMiles® Reserve American Express Card
Delta SkyMiles® Reserve American Express Card 2022 Review

Table Of Content

Are you looking for a set answer on how much you should save every month? The truth is that there’s a wide variation of this depending on your specific situation.  

Savings are a crucial part of financial stability. Whether you have an emergency fund or investment funds, savings can provide security against unforeseen events or situations. As you can see in this chart using 2019 FED Survey of Consumer Finances data, Americans are saving more. In 2016, American savings had a value of $0.92 trillion. This has steadily increased over time to reach $1.29 trillion in 2019.

How Much Americans Save

Now, the base answer is that you should be saving at least 15-20% of your income, but this will also be broken into different categories. For example, 10-15% of your savings should go to retirement accounts. The rest should go toward emergency funds, savings accounts, and debt payments.

But there’s more to it than just that.

How Much Do You Need to Save?

Saving money is something that most people do after they’ve paid off everything else. Instead of being the first thing that they do it’s actually the last thing that they do. But saving money first is the best way to make sure that you have some at the end of the day.

You should be putting 5-20% of your income into savings before you even spend any of it. That way you automatically save and you can’t spend any money that should be going to savings. You’ll know that you are already on a good path for yourself.

What Percent Should you Save Every Month?

This depends on what you are saving for and how much money you think you will need to result in your end goal. If you want to pay for a $10,000 car in cash within the next 5 years, you will need to save $167 per month at least. The percentage of this amount depends on how much you make annually.

Some experts say that 20% of your income should go to savings, but this isn’t a set number. Some people will need to save more than others, say if they have a large family or need emergency funds.

Here are the most common methods to consider:

1. The 50/30/20 Rule

If you’re not sure how to get started saving try out these methods. With this version you actually save 20% of your money (or put it toward debt) every month. This budget says that you put 50% of your household income toward your necessities and expenses like your home, car, and food.

You then put 30% toward the things that you want, like going out to eat or the movies, and the remaining 20% goes to debt and savings. That way you can make sure you’re paying off the things you don’t want hanging around.

Now, in order to make this work, you'll need to earn a reasonable fixed monthly income. That means you'll need an amount you can count on coming into the account so you can figure out how much money will go into each area.


Video You May Like

2. The 10% Rule

Another option is to put at least 10% of your money into savings right away. You actually take a look at your total income after taxes and deductions. Then you calculate a total of 10% of that amount of money. That’s the amount that you send to your savings account and it should be sent there before you pay anything else.

If you bring in $1,500 you should then put $150 toward your savings, before you do anything else. Keep in mind that this is just a starting point and you should be trying to increase this as much as you can.

Why 10% Is Not Enough?

10% used to be considered a good amount for your retirement savings, but we now know that it just isn’t enough. Consider someone who saves $5,000 a year with a $50,000 salary.

If you start saving at 30 with an expectation to retire at 65, how much money would you have?

If we assume 5% annual returns (which aren’t guaranteed) and an employer match of 50% for half of what you have you’re off to a good start. If you estimate 3% raises each year and subsequent increases to your contributions you’d have $850,000.

Now, that may sound like a lot of money, but when it comes to inflation and all the things you’re going to need to pay for after you retire you’re at about $400,000 of money and you’re not going to get very far on that. You’re going to need a lot more money saved away.

Of course, you’re the one that has to decide how much money you’re going to need in retirement, but it’s better to aim high then to find yourself struggling later on, or having to get a job after you retire.

Saving at least 20% of your money is going to be a good way to go and set you up for a better life that you can enjoy. Keep in mind that every little increase that you may can help you retire a little earlier or it could help you have a little bit nicer lifestyle once you do retire.

What if I Just Can’t Save that Much?

Some people can’t save as much as others and that’s okay. Saving any amount, no matter how small is better than saving nothing at all. Always pay your bills first and then put money into savings before you spend money on new things or entertainment.

You could also consider getting a second job if you can for a while to see if you can quickly save more money. This might help boost your savings account for a few years or months.

Where to Save Your Money?

The next question many people have is where to save their money or where to put the money that they have earmarked for saving.

  • High-Interest Debts

If you have a high-interest debt then it’s important to pay this off before you do anything else. If you have unpaid balances on multiple credit cards, you should begin by paying off the card with the highest interest rate.
Pay as much as you can toward that debt each month until your balance is zero, while continuing to pay the minimum on your other cards. The same advice applies to any other high-interest debt (around 8% or higher) that does not provide any tax benefits.

Based on a survey by, the national average credit card rate in 2019 stood at 17.57%. Americans who held bad credit cards were charged the highest interest rate of 24.99%, while the credit card for low interest enjoyed lower rates at 14.61%.

Chart: Credit Card Rates in the U.S. 2019, by Card Type

You’re going to be spending a whole lot more in interest than you will earn on your savings so make sure that you put this ahead of anything else you’re doing.

  • Retirement Savings

Next up, you need to make sure that you’re putting some money away for your own retirement. You should save around 15% of your income, but whatever you can put away is going to be better than nothing, so put at least as much as your employer will match (and max out that match).

Remember that your goal is to get up to 20% of total savings, but that doesn’t mean all of that needs to be in the form of retirement. The rest should go to other types of savings accounts so you have some money left over if you need it.

Make sure you’re signing up for automatic contributions if your company offers them. That means you don’t have to worry about depositing the money. It gets taken out of your paycheck before you even see it. That gets you used to not having the money.

For those who don’t have retirement options at their place of work make sure you create one somewhere else and still try to set up automatic payments and transfers so you don’t have to do it manually.

  • Emergency Savings

You should only use your emergency fund for true emergencies, such as keeping yourself afloat between jobs, car repairs, medical expenses, or home repairs. You cannot use your emergency fund to go on a vacation, go on a shopping spree, or upgrade your perfectly good cell phone or laptop.

Having a substantial emergency fund provides you with peace of mind. Nobody wants to be one paycheck away from being unable to pay their rent or one car breakdown away from being unable to get to work.

These are crucial because in the event of an emergency you might otherwise find yourself using your credit card or borrowing against your house or retirement savings. Those are going to hurt you financially in a number of ways, so create a bit of a savings buffer in case you need it later on.

  • College Savings

If you have children or if you’re planning to go to college you should start saving for this right away. The more you can save the better it’s going to be for the entire family. But keep in mind that saving for your own retirement is going to be even more important. You can’t borrow money for retirement, but you can for college.

Also, encourage your child to start saving for their own college education as soon as possible. Even a little bit at a time is going to make a big difference later on down the road.

Based on data from Ascensus, there is a gradual increase in the 529 Savings Account Average Balance based on age. The chart shows that the people in age 25 to 34 years have the lowest average balance at $8,302, but this increases to $20,479 in age 35 to 44 years, then to the highest average balance of $38,490 in age 45 to 54 years. This shows age 45-54 years is when 459 savings peak as the account holder readies for retirement.

Chart: 529 Savings Account Average Balance in the U.S. 2020, by Age

  • Special Purchases

If you really want to buy something special you should also have an account prepared for this. Make sure that you’re doing everything you can to put money toward your retirement and your savings first and then start looking at other goals that you might have and how you’re going to pay for those as well.

Prioritize the goals you have and then create a fund that will help you get there.

How Can I Save More Money?

If you’re struggling with just how you can actually save the best thing to do is take a look at some of these options and see if they can help you. You might be surprised at just what you can do with your money if you’re doing it right.

1. Put a Purpose to It

The first thing is to put a purpose to your savings. Just saving, in general, doesn’t excite most people and you find yourself struggling to keep up the motivation.

You make daily decisions that have an impact on your long-term goal. When you have a specific long-term goal in mind, you suddenly have context and can make better decisions. Better decision-making in that small decision moment over time guides you toward achieving a larger goal — specifically, what you're saving for.

When you set a savings goal, the goal itself motivates you to continue managing your money wisely, whether by saving more money or earning more money. You'll be surprised at how much of a difference the right motivation can make in your efforts to achieve financial independence.

This powerful motivator for increased savings and income can alleviate the reluctance that is often associated with changing your lifestyle in order to cut unnecessary expenses and avoid financial burnout.

If you have a goal and a plan in place it can change your mind about saving however and you might be more interested in the process. Just make sure you’re trying to put away money for your retirement and then that you’re putting it away for something fun and exciting. You’ll be more willing to make sacrifices this way.

Suggested Video From Our Channel


2. Set a Budget

Okay, a budget isn’t exactly exciting, but you can absolutely create a great budget and then stick to it a whole lot easier. If you do, it’s going to be a lot easier for you to save money and you’re going to have a better idea of how much money you actually have to put toward different things that you need or want.

Extending your budget allows you to forecast how much money you will be able to save for important things like a vacation, a new vehicle, your first home or home renovations, an emergency savings account, or retirement.

Using a realistic budget to forecast your spending for the year can be extremely beneficial to your long-term financial planning. You can then make reasonable assumptions about your annual income and expenses and plan for long-term financial objectives such as starting your own business, purchasing an investment or recreational property, or retiring. Home budget calculator can be very helpful and save you a lot of time and calculations.

3. Save Automatically

Setting up direct deposit for your savings is always going to be a good option. It’s going to help you save money without even really realizing that you’re doing it. You won’t know that the money is even in your paycheck because you’ll never actually see it.

This is going to trick your mind into thinking that the money in your checking account is the only money that you have, which keeps you saving and never feeling like you’re sacrificing.

4. Pay Yourself First

Make sure that you’re putting a set amount of money into some kind of special account or into some type of retirement and that it’s all happening automatically. This money should be prepared before you do anything else because it’s going to help you save, without having to worry about doing it yourself.

When you try to do it yourself it’s easy to decide that ‘this month won’t work.’ Doing it automatically means you won’t even notice it.

Bottom Line

Overall, you want to make sure that you’re saving at least 15-20% of your monthly income in some way.

Whether you’re putting most of that toward retirement or toward debt or even into a savings account is going to depend on you, but it’s absolutely something that you need to start working on.  

Just make sure that you’re taking a close look at the options and at the best ways to start saving and allocating your money toward making a better life and a better future for yourself. You’ll be much happier in the long run. 


Saving for retirement can be hard depending on your income and the debt and bills you have to pay. Regardless of how much money you make, experts say to save about 10-15% of your pre-tax income.

Keep in mind that some bosses match what you save or put into a 401k. If you have an employer who matches, then you are only saving 5% yourself because the employer will put in the other 5%, putting you at 10% overall.

It depends on how much the house cost. Sometimes it might be a better decision to save only to put a large down payment on a home rather than the entire price of the house. Saving for a house can take many years and you might waste more money renting than you would if you took out a mortgage.

If you want to put a $40,000 down payment on a house within the next two years, you will need to save at least $3333.33 a month. You will then be able to put down a large down payment and finance the rest of the house.

This depends on what kind of school you are going to and when you plan to go. If you are going within the next couple of years, you will need to save more to reach your goal. If you are going to a private school or out-of-state school, you will also need to pay more.

Try and research schools in your area or the school you want to attend and find out much the tuition is. Then consider when you want to go to school and for how many years. This should give you an idea of how much money you need to save per month to go to the school of your choice.

This will depend on your child’s needs and where they might go to college in the future. If you think your child will go to a public school, you need to save around $250 a month until they are 18. For private schools, you will need to save 5450 a month and for out-of-state schools, you will need to save $450 a month.

If your child has special medical needs or you want the child to be able to do sports or other activities, you will need to save more per month starting when they are born.

Prioritizing savings can ensure that you have extra money when you need it. If you need car repairs or emergency work done on your home, you will be able to have the money for it without waiting.

Saving money also teaches responsibility and shows you how to budget and take care of your own finances. Having savings will also allow you to not have to rack up credit card debt or take out loans.

Emergency funds will allow you to live for a few months off your savings if you were to lose your job or have another emergency where you might lose income and wages. Emergency funds will also help you have an unexpected expense come up for yourself or your family.

An emergency funds will also ensure that you have money when you need to for medical issues, car repairs, home damage, or anything else that might happen in your life.

People often spend more money than they realize. If you don’t have a budget and you aren’t tracking your spending, you might be spending more per month than you intend. Budgeting your money and your expenses will ensure you are only spending the money you have.

People who budget often track how much money they have coming in and then they will keep a list of how much money they spend every month. You can then put whatever you have leftover into savings or an emergency fund.


Find your best credit cards

Quickly see which cards offer the lowest rate, most cash back or sweetest perks.

My credit score is
I need