How Much Should I Save Each Month?

Many people are asking themselves: how much should I save each month? We’re not talking absolute numbers, but a percentage of your income. Let’s get to the answer today!

When you’re looking to work towards financial security or financial independence, saving is the way you will get there fastest. 

While many know that, it’s hard to know how much you should save exactly

As always with personal finance, this is different for different people depending on your personal situation. 

How Much Money Should You Save Every Month?
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How Much Should You Save Each Month?

According to the 50/30/20 rule from Senator Elizabeth Warren, at least 20% of your income should be saved. 50% goes to needs and 30% goes to wants. 

Ideally, 15% of that 20% you are saving will go to retirement savings or investments. The remaining 5% should go towards you building your emergency fund or paying down extra on your debt (the minimum payment on your debt is not accounted for in the savings category). 

This may be a good rule of thumb, but it’s not the entire story. If you want to know how much money you should save every month in more detail, read along!

Why Stick To The 20%?

If you’re sticking to the 20% savings of your income, this is a great amount to work towards financial independence. This will work best when you are in your 20s or 30s. That means you can still enjoy an early retirement if that is what you want.  

This is a good rule of thumb to get started. 

What Are You Saving For?

When you’re thinking about how much money you should save every month, you should also be thinking about what you’re saving for. This highly depends on your financial goals. 

You can save for:

  • Short-term financial goals
  • Long-term financial goals

Short-Term Financial Goals

Short-term goals can be anything from random acts of kindness, taking a lovely vacation, or saving enough for the holidays in December. 

Anything that has a lifespan of under one year is considered a short-term goal. Whether you want to save $5,000 for a car or invest $3,000 that doesn’t matter. As long as you want to reach it in less than a year it’s short-term. 

When you know you want to save an additional $2,000 for your emergency fund in the upcoming 8 months, you know that you need to save $250 per month in order to reach that goal.  

Long-Term Financial Goals

Long-term financial goals are goals for longer than a year. This can be something like remodeling your house, save for (early) retirement, or getting married.

Whatever it is that you’re saving for, you need to save money in order to do it.

Working Towards Your Financial Goals

If you have several financial goals, it can be hard to reach your financial goals with a proper plan. 


What gets measure gets managed

When you’re creating a list of your financial goals and making a plan for them, you are consistently measuring your progress towards your goals. 

What you need to do:

  • Make a list of all the goals you are saving for right now
  • Write down how much you need to save for each goal (total)
  • Write down the date you want to have that total amount
  • Calculate the monthly amount you need to save for each goal

To clear things up, let’s run an example. If you want to buy a $6,000 car in 12 months, you need to save $500 per month towards that goal in order to buy the car a year from now. 

This is what you do with every financial goal that you have written down. 

Yes, every single one of them. 

Don’t worry when your goals exceed your monthly expenses. I did this a couple of months ago and my desired savings ended up being bigger than my gross income.. 

Just calculate it, for now, we will tackle the problem that you’re not able to save that much right after that. 

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What If Those Savings Are Not Attainable Right Now?

The first thing I want you to know is that this is very normal. This is your ideal life and that takes time to get towards. 

It is important that you are checking your goals and checking whether or not these are all aligned. Try adjusting the overly expensive things that are negotiable. Buy a second-hand car, buy a smaller house, or spending a couple of thousands less on your dream vacation. 

When you’re looking over your goals, realize that you want to make as much possible as you can within your current budget. Try to cut in the things that are not important to you and spend on the things that are important. 

If you’re finished looking over your goals, check out if you can cut your spending. There are a million ways to save money.

A couple ways to save money include:

Another way to make sure you can meet your savings goals, is to get extra income that will cover the extra expenses you are planning on making. 

When you want to earn some extra money through a side hustle, here are some of my favorites:

Be Kind To Yourself

It is important to remind yourself: this is the end goal. This is not necessarily where I need to be today. It is something that I can work towards. 

If you don’t have enough savings monthly to meet the financial goals you have made, that’s totally fine. Start with what you have right now and work your way up. 

This can be done by saving money like discussed above, by spending less on the things that you don’t give much value to and spending more on things you absolutely love. 

Once you are living more frugally and saving money, go for extra income. Start building your passive income or start a side hustle. This is a great way to increase the gap between your earnings and your spending. 

One last reminder: if you’re currently paying off a lot of debt, you’re on the right track. The money you are paying off now is money that you will be able to add to your monthly savings once that debt is fully paid off. 

Start Investing

While investing may be daunting to most, it is important to get over your fear of the stock market and start investing!

Starting with investing is not so hard as most people say it is. Investing your first dollar is actually quite simple. 

Investing will go a long way. Historically you will get 7% average return on your investment, how great is that?! That’s certainly more than any bank is paying at this moment. 

If you’re thinking about starting with investing, I would suggest:

  • Vanguard – One of the biggest investment companies that facilitates all kinds of investments
  • DEGIRO – A low-cost European broker that I’m personally using
  • M1Finance – This is a US-based website that allows you to build your own stock portfolio, completely for free. No fees involved!

Check them out for yourself and see which one fits your needs best. 


There are many ways to answer one question. 

How much money should I save every month?

The short answer is:

  • If you want to be specific for your situation, write down your goals and how much you will need to save monthly for them.
  • If you want a rule of thumb, save at least 20% of your income. 

How much money do you save every month?

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