Budgeting Financial Planning Saving Money How Much Money Should You Save Each Month? By Miriam Caldwell Miriam Caldwell Miriam Caldwell has been writing about budgeting and personal finance basics since 2005. She teaches writing as an online instructor with Brigham Young University-Idaho, and is also a teacher for public school students in Cary, North Carolina. learn about our editorial policies Updated on July 12, 2021 Reviewed by Anthony Battle In This Article View All In This Article The 10 Percent Rule Beyond Retirement Savings Put a Crimp on Your Lifestyle Build Up the Amount You Save Have a Purpose Let Your Savings Work for You Photo: Jamie Grill / Getty Images How much money should you save each month? The simple answer is, as much as you can. Everyone makes a different amount each month. They also have different monthly financial obligations. It is important to realize that one dollar amount is not going to work for everyone. However, there are some basic guidelines you can follow when determining how much you should save each month. The 10 Percent Rule The standard that many experts set is to save at least 10% of your income. This is a good starting point, and easy to manage because it is a set amount of money each month. It might be a challenge to stick with it, but it's one many people can manage and increase over time. Eventually, you can work up to 20% or even 30% to increase your savings and plan for your future. Beyond Retirement Savings It is important that you are saving on top of the money you are putting in your retirement savings account. If you do not, you will never save up money for an emergency fund or a downpayment on your home. Additionally, if you want to retire early, you will need to have savings that you can live on that is separate from your retirement accounts, which you typically cannot begin accessing without a penalty until you are 59-and-a-half years old. It is important that you make saving for needs besides retirement a priority. Put a Crimp on Your Lifestyle Another common way to measure whether you are saving enough money is to check and see if you are saving until it hurts. If you feel like things are just a little bit tight, then you are probably saving a good amount. You may want to lighten up enough that you have breathing room in your budget, but keep it tight enough that you still have to watch what you are spending each month. This doesn't mean that you never have fun or splurge, but you need a savings plan that limits that splurging so you aren't sacrificing your future. Note The earlier you can build good financial habits, the better off you will be. You can use strategies to help you save in your 20s. Start by automating it. You'll get used to putting away money without thinking about it—and before the excuses get in the way. Build Up the Amount You Save You may also want to work on increasing the amount you save each month. It is not unreasonable to begin saving 20% of your income or even more each month. If you make a significant amount more than you need to live on each month, then you really should save a lot of money. One easy way to increase the amount you save is to put away more whenever you get a raise. This way you won't feel it as much. Also, give yourself challenges each month to make sure that you are setting your spending categories as low as you comfortably can. Have a Purpose Once you begin saving your money, you should give it a purpose. For example, you should have three to six months of living expenses set aside in an emergency fund. Then you may set aside a portion to save for retirement. After these, you can think about putting away money for that vacation or a new home, or simply for building your wealth through other investments. If you know what you are saving for, it is easier to make the sacrifices that you need to get there. Let Your Savings Work for You As you begin to look at the ways that you can save money, you will be surprised at the power that your money has. It will begin to grow very quickly if you are diligent in saving each month. The sooner you work to build up good savings, the sooner your savings can start to work for you. Was this page helpful? Thanks for your feedback! Tell us why! Other Submit Sources The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. IRS. "Early Withdrawals from Retirement Plans."