How much should I save each month?

Most Americans struggle to save enough money. According to Bankrate’s 2025 Emergency Savings Report, only 41% of U.S. adults could cover an unexpected $1,000 expense from savings. Whether you’re just starting your savings journey or looking to boost your existing savings strategy, understanding how much to save each month is a crucial first step.

How much should you save each month?

“While I know everyone loves rules of thumb and easy tips, there isn’t a percentage that works across the board for everyone,” says Laura Davis, CFP and founder of Financial Labs Inc.

There’s no one-size-fits-all answer to how much you should save monthly, but there are several widely accepted guidelines can help you establish a reasonable target for yourself:

The 15 to 20 percent rule

Many financial experts recommend saving at least 15 to 20 percent of your gross income (before taxes and other deductions). This percentage includes retirement contributions (including employer matches), emergency fund contributions, and savings for specific goals like a home down payment or vacation.

The 50/30/20 budget rule

The 50/30/20 budgeting method offers a simplified framework for managing your money. It suggests allocating 50 percent of your take-home pay toward needs (housing, food, utilities), 30 percent toward wants (entertainment, dining out), and 20 percent toward savings and debt repayment.

Adjusted for income level

Your income level can impact how much you’re able to save. If you have a lower income, focus on building at least a small emergency fund first, even if you can only save 5 to 10 percent of your income. Those with middle incomes should aim for 15 to 20 percent, balancing emergency savings, retirement, and other goals. Higher-income earners might consider saving more than 20 percent to maximize tax advantages and build wealth faster.

Remember that these are guidelines, not strict rules. The right savings amount for you depends on your individual circumstances, including your age, debt level, income stability, and long-term goals.

What should you save for?

Think about saving money like running a race: The competition is going to feel a lot better if you have an idea of which direction to head for the finish line. Of course, saving isn’t ever really “finished” — you’ll be constantly working toward different financial goals over the course of your life.

Here are some examples of what you should save for:

1. Emergency fund (highest priority)

Your emergency fund serves as financial protection against unexpected expenses or income disruptions. Aim to save a minimum of $1,000 as a starter emergency fund, with an ideal target of three to six months’ of essential expenses. Those with variable income or less stable employment should target the higher end of this range or potentially save even more.

2. Retirement savings

The earlier you start saving for retirement, the more time your money has to grow through compound interest. At minimum, contribute enough to your employer’s retirement plan to receive the full match — it’s essentially free money. Ideally, aim to put 10-15% of your gross income toward retirement, including employer matches.

3. Specific financial goals

After establishing your emergency fund and retirement savings, allocate additional savings toward your personal financial goals. These might include a down payment for a home, children’s education through 529 college savings plans, major purchases like a car or home renovation, travel experiences or even early retirement.

Where to put your savings each month

In addition to thinking about how much you should be saving, you should also consider where you should be depositing the money. Different savings goals require different types of accounts.

For emergency funds and short-term goals (0-3 years)

High-yield savings accounts offer significantly better interest rates than traditional savings accounts, helping your money keep pace with or exceed inflation while remaining easily accessible. Money market accounts sometimes offer competitive rates with limited check-writing privileges. For funds you won’t need immediately, certificates of deposit (CDs) can provide higher rates, especially through a CD ladder strategy.

For mid-term goals (3-10 years)

High-yield savings accounts or CDs remain likely best for goals within this timeframe. Investment accounts with conservative to moderate allocations may be suitable, depending on your risk tolerance and timeline. Series I savings bonds offer inflation protection for funds you won’t need for at least one year.

For long-term goals (10+ years)

401(k)s, IRAs, and other retirement accounts offer tax advantages that significantly boost long-term growth. Brokerage accounts provide flexibility for non-retirement long-term goals, while 529 college savings plans offer tax advantages specifically for education savings.

Ways to boost your savings

Once you have an idea of where things stand and what you can afford, you can begin to focus on how to save more each month:

• Pay yourself first. Treat savings as a non-negotiable expense, just like your rent or mortgage. Make saving your first financial priority each month before allocating money to discretionary spending.
• Track your spending: Consider using a budgeting app or spreadsheet to track your spending and identify if there are any places you can cut back and put the difference into savings.
• Automate your savings: Set up automatic transfers from your checking account to your savings accounts on payday. What you don’t see in your checking account, you’re less likely to spend.
• Cut unnecessary expenses: Review your spending habits to identify areas where you can reduce expenses. Look for subscription services you rarely use, frequent dining out or takeout meals, impulse purchases and premium services that could be downgraded. Small cuts across multiple categories often add up to large savings.
• Save any windfalls. This could include tax refunds, bonuses or cash gifts. Alternatively, you can look for ways to increase your income, like finding a higher-paying job or starting a side gig. 
• Look for round-up tools: Some banks offer a feature that links your debit card spending to your savings account. For example, if you buy a coffee that costs $4.55, a round-up tool will automatically transfer 45 cents from your checking account to your savings account.

Building a sustainable savings habit

If saving 20 percent of your paycheck seems impossible right now, then save what you can. Just follow Davis’ simple one-word rule: “Start.”

Set realistic savings goals that challenge you without being so strict that you can’t maintain them. A sustainable approach is better than an ambitious plan you quickly abandon. Remember that consistency over time matters more than the exact percentage you save each month.

It’s also a good idea to regularly monitor your savings growth to stay motivated. Many banking apps and financial tools make this easy by automatically tracking your savings and net worth. Seeing your progress visually can provide powerful motivation to continue your savings habit.

“It’s OK to begin with something less than 20 percent, but to attempt to escalate the savings funding over time,” advises Hamrick. “I have yet to meet anyone who complained that they had saved too much money.”

Balancing future goals with present needs

Effective saving requires balancing tomorrow’s goals with today’s quality of life.

To balance your short-term and long-term needs, distribute your savings across different time horizons to ensure you’re prepared for both immediate needs and distant goals. Short-term savings might include your emergency fund, vacation fund and savings for major purchases. Medium-term goals could include a down payment for a home, education costs or career transition funds. Long-term savings typically focus on retirement, children’s college fund and broader wealth building.

Trying to save too aggressively can lead to “savings burnout” — where you become so restricted that you eventually abandon your savings plan entirely. To prevent this, build some discretionary spending into your budget and revisit your savings goals periodically. Find low-cost ways to enjoy life while still saving, and focus on cutting major expenses rather than denying yourself small pleasures.

Your savings strategy should evolve as your life circumstances change. Career advancement often means you can increase your savings rate as your income grows. Family changes, such as getting married or having children, may require adjusting your priorities. During major life transitions like job changes, moves, or health challenges, you might temporarily modify your savings approach. As you approach retirement, shifting toward more conservative savings vehicles often makes sense.

Remember that consistency matters more than perfection. The most successful savers aren’t necessarily those who save the most every month, but those who save regularly over time.