If you are asking yourself what you should save each month, you are not alone. This is a question that many people ask themselves as their incomes become more consistent.
Since building wealth is a crucial part of your long-term financial future, it makes good sense to set aside a fixed amount each month.
If you are hoping to increase your savings regularly, this can have a substantial impact on your future financial well-being. If you have a savings goal each month, then you will be sure to stick with a budget in most months.
Even if you do not meet your savings goal each month, it is sound advice to retain some of your monthly income for an impending rainy day.
Let’s take a closer look at how much you can save a month.
Why should you prioritize saving each month?
Preparing for a higher salary and future investments are worthwhile. However, the savings you make each month will rapidly reach their maximum potential and allow you to reach your future financial goals.
It is easy to put off saving money because the future seems so far away. It is tempting to live only in the present and squander every penny along the way. We are fortunate to have our youth and to be able to enjoy it, but most of us struggle financially.
In fact, 78% of Americans live paycheck to paycheck. And almost 40% of adults could not cover a $400 emergency with cash, savings, or a credit card that could easily have a negative effect on their finances.
That’s why the money you save can yield some flexibility in your day-to-day life. Additionally, it provides you with peace of mind as you navigate life.
You have more independence in your decisions than you would be if you worked for a company. You can build your savings for the items that matter most to you.
How much should I save a month?
So, how much can you save a month? Well, the amount will vary from case to case. Here are some ways that each person’s goals may differ.
How much should I save per month based on my financial goals?
Look at your life goals when deciding on your savings goals. Consider the logistics of making large purchases such as a new car or a luxurious vacation.
Long-term plans, like buying your first house or retiring, are also important for saving money.
Setting large savings goals like a vacation or stress-free retirement can be challenging, but breaking them down to monthly budgets is easier than it sounds.
Say, for instance, if you plan to retire early, then you should aim to save around half of your monthly income. However, if you hope to retire in your seventies, you will likely not need to save as aggressively as someone closer to retirement.
The monthly savings target you set for yourself is really a personal decision. Be sure to consider your personal goals when you set up your savings account.
That will allow you to get started, aim to set aside 20% of your take-home pay each month. It’s a common industry convention that many experts recommend.
This is based on a budget of 50 to 30 to 20, meaning that you devote 50% of your income to necessities, save 20%, and leave 30% of your income for discretionary purchases.
So, if you bring home $1,000 after tax every month, you would aim to save $200 every month. You could then divide this amount into several different vehicles.
For example, you may dedicate the retirement savings you have made to a 401(k) or Roth IRA. You could also put this money into a high-interest savings account until you’re ready to spend it on your upcoming vacation.
How much should I save each month based on my monthly expenses?
One of the most important considerations to ask yourself when you ask yourself “How much of my income should go to savings each month?” is starting an emergency fund. In fact, it may be the best place to start your monthly savings.
Having emergency savings plans you for the inevitable challenges life throws your way. A good starting place is 3 to 6 months of savings, then 12 months if it makes the most sense for your situation.
If you find yourself in a medical emergency or experience car trouble, you can fund these expenses without going into debt by depositing an emergency fund. Homeowners can also establish an emergency fund for unexpected home repairs.
Save at least three months’ worth of living expenses in emergency savings. The exact amount is your emergency fund ratio.
If the amount seems high, bear in mind that this refers to your monthly necessities for necessities such as rent, groceries, utilities, and transportation. This is the bare minimum you must pay for these items.
Having an emergency fund gives you peace of mind and you can focus on the actual emergency at hand rather than how to pay for it.
How much should I save per month based on my life situation?
Of course, it may not be possible to set aside 20% of your income in your current situation. And that’s absolutely okay! Take a look at your finances and determine how much you can afford to save every month.
The less money that is saved, the more money that is lost. Every little bit helps, and it all adds up. Even if you could only save $20 per week, this still saves you $1,040 at the end of the year.
As you go through life, reevaluate your plans as you go along. For instance, if you can negotiate for a raise, you may increase your savings rate.
Since unexpected costs can occur at any time, don’t get discouraged if you don’t reach your monthly goals.
Life can throw you plenty of curve balls, so adjust your savings goals to adjust to the obstacles you encounter.
How much money should I have saved by age?
Saving money for the future is always a good thing. However, our financial state may not permit us to do so consistently or even keep the money that we have earned.
Nevertheless, knowing where you are financially or in cash is still important. Here are some statistics on savings by age.
How much money should I have saved by age 30?
According to the Federal Reserve’s data, individuals under 35 years of age have an average savings of $34,780. So, if you’re younger and have less income than the average person, you’re doing very well if you have that much money set aside.
And if you’re older than 35 but don’t have that much cash in the bank, you can start saving money today.
How much money should I have saved by age 40?
After the age of 35 and up until about age 44, the average American household makes approximately $170,740 in yearly income. This is also the time to stop procrastinating and start saving for retirement.
For that, Fidelity recommends having at least three times your annual salary saved at 40.
How much money should I have saved by age 50?
According to the findings of the study, Americans between the age of 45 and 54 have an average financial assets of $507,660. At this point, your retirement portfolio should have at least six times your annual salary at Fidelity.
These numbers are not arbitrary, but they provide good guidelines for your savings goal or your progress.
Try not to get discouraged if you are not there yet. The most important thing is you begin saving your money when you can.
How much should I save each month calculators
Not many people enjoy doing math.
If you want to save for retirement, an emergency fund, or life milestone events such as a wedding, it’s best to have a specific amount to save each month.
These “how much should I save each month calculators” will help you determine how much money you need to be setting aside to reach your goals.
Investor.gov Savings Goal Calculator
Want to know how much you will save per month to achieve your goal? Enter the specific amount you want to save, the number of years you want to save it for, and the Savings Goal Calculator will tell you what you must deposit every month.
Bankrate Simple Calculator
Use Bankrate’s Simple Savings Calculator to see how much your savings increase over time. Or set a specific target amount, such as a down payment on a home, and see how far you can get to that goal.
The Calculator Site
Use these Savings Goal Calculators to determine how much you can save each month to reach a financial goal. Use them to develop a saving plan for putting money away.
Emergency fund calculators
If you would like to save for future emergencies, here is a list of our preferred emergency fund calculators. Just enter your expenses and it will tell you how much you need to set aside.
How to save more money each month
When you’re calculating how much money you should save each month and set your goals, you might need to make some changes to your savings habits in order to meet those goals.
Let’s take a look at some of the ways that you can save more money each month.
1. Evaluate your priorities
As you start saving more, you should evaluate your objectives. You should not get rid of all of your fun items in an attempt to meet your goals. Instead of worrying about the money that you need to spend, get creative with the expenditures that do not make you happy.
For example, you might not be able to give up weekly restaurant outings with your friends. Nevertheless, you could cancel several subscriptions that are rarely used anyway.
2. Try to be frugal
Sometimes, being frugal is mistaken for being cheap.
Savvy shopping can require finding the least expensive prices, but being frugal involves spending your actual income instead of wasting it on worthless purchases. Practicing fiscal restraint can enable you to save money even while living a better lifestyle.
Here are some tips to save money on your purchases:
You can save a great deal of money by simply searching for better deals with anything you buy. Whether you are comparing car insurance quotes or want to discover better prices at the grocery store, you’re typically able to save more cash than you expect.
Be sure to ask for discounts as well. You never know what kind of store or service provider they might have to offer!
Coupons can save you money while allowing you to purchase high-quality products. Check out our recommended coupon sites below.
If you enjoy something you see, wait at least 24 hours before making a purchase. You might change your mind about purchasing it after 24 hours. This practice will help you be more careful about your expenses.
Meal planning will save you time since you will shop and plan your meals in advance. Try our 30-day cooking challenge to see how much you can save by preparing your own meals.
Below are some ways to become more frugal. Try to be innovative in your own life!
3. Earn more
If you are unable to cut any expenses from your budget, then the best thing to do is earn more money. Your revenues potential is not fixed.
The best way to move forward is by asking for a pay raise at your job. You might be able to obtain more money for the same amount of work.
If similar opportunities are not available, consider starting a side business to add financial resources to your bank account. By working hard and being creative, it is possible to develop a lucrative side gig that greatly increases your income while boosting your net worth.
If you want to build a side business, then consider signing up for our side hustle course where you can learn how to do it.
4. Try a savings challenge
A savings challenge is a fun way to motivate you to save more. As you complete the challenge, you may find that you have the ability to save more than you thought.
Start your 90-day savings challenge by setting aside every $5 bill that you receive within 90 days.
With our efforts, you will have an incentive partner that can motivate you to stay on track. It is surprising to see how much you can save by using this strategy.
You can save money each month!
Building a healthy financial future is important, and it can be a challenging task to get started. However, it gets easier with practice.
As you ponder the question, “How much should I spend per month?”, consider your personal financial situation and determine how much you should save. Perhaps you want to set aside $5,000 over 3 months or $10,000 per year.
Think about how much you are able to earn based on your income and expenses. Then, pick a price range that works for you.
You can save money each month with prefunding. Even though it may not always be easy, your future self will thank you!