How Much Money Should I Save Each Month?

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The simple answer is as much as you can. Everyone makes a different amount each month. They also have different financial obligations each month. It is important to realize that one set dollar amount is not going to work for everyone. Here are some basic guidelines you should follow when determining how much you should save each month.

Start With 10% of Your Income

The standard that many experts set is at least ten percent of your income.

This is a good starting point, to save ten percent of your salary. It is an easy way to start, because it is a set amount of money each month. It should not be that difficult to save ten percent of your income, but you may want to increase this amount over time. Eventually you can work up to twenty or even thirty percent to increase your savings and plan for your future.

Make Sure Your Savings Puts a Crimp on Your Lifestyle

Another common way to measure whether or not you are saving enough money is to check to see if you are saving until it hurts. If you feel like things are just a little bit tight, then you are saving a good amount. You may want to lighten up enough that you have breathing room in your budget, but tight enough that you still have to watch what you are spending each month. This does not mean that you never have fun or splurge, but you should be saving enough so that you are not splurging every single day.

Work on Building 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 twenty percent 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 save more as you get a raise. This way you will not 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.  It is also important to remember to give.

Give Your Savings 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. Many experts say that you should strive for fifteen percent each month for retirement alone. Then you may set aside money for a vacation or a new home. After that you may have some that you save just to build your wealth.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, and get out of debt, you will be surprised at the power that your money has.

It will also begin to grow very quickly if you are diligent in saving each month. You can use strategies to help you save in your twenties. The early you can build good financial habits, the better off you will be. Saving money consistently is an important financial habit to establish now. If you make saving automatic, it can be even easier to save money each month. This allows you to save without spending time each month focused on it. Setting up an automatic transfer is the easiest way to do this.

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