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How much should you save per month?

How much should you save per month?
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Saving money can be highly rewarding. It can make it easier to pay for large items such as a new home, while also potentially bringing retirement a step closer. Having an emergency fund, meanwhile, could ease anxiety regarding lost employment or unexpected home repair costs, for example.

However, deciding how much to save each month can be a tricky task. With that in mind, here are two ideas on how much an individual may wish to save each month. The first involves setting goals, which can provide a detailed savings plan. The second is a simpler idea called the 50/30/20 method that may be more appealing to time-constrained individuals.

Setting saving goals

A logical place to start when deciding how much to save each month is determining an individual’s savings goals. They can be split into a number of categories, with an individual deciding how much is required within each of the different categories. This will allow them to determine how much needs to be contributed to them so that they are met over a set time period.

For example, they may end up with a list of categories and considerations on how much to save as follows:

  • Emergencies – to be used in case of lost employment or required repairs to home, car etc. This may be between three and nine months’ worth of expenditure in order to allow an individual the time required to find new employment.
  • Housing deposit – this would be used to eventually pay for a deposit on a home. Its size would depend on an individual’s local house prices and the size of home they are seeking to purchase.
  • Retirement fund – For most people, a second income may be required in retirement due to the low payout from the state pension. The amount needed will depend on factors such as when an individual plans to retire, and what their spending may be in older age.

An individual may end up with specific figures on the amount they wish to save for each goal, and then decide over what time period they need to be met. Dividing the amount by the time period could help to provide a specific savings figure that needs to be met each month in order to fulfil an individual’s savings goals.

50/30/20 rule

For individuals who prefer to have a simpler and less detailed method of working out how much to save each month, the 50/30/20 rule could be appealing. It states that 50% of after-tax income should be spent on necessities, 30% should be spent on discretionary items, with the remaining 20% saved for emergencies and retirement planning. This could be a sound means of adopting a simple budget which ensures that an individual is able to balance their present-day requirements alongside a plan for the future.

Clearly, the 50/30/20 rule can be adapted to different stages in a person’s life. For example, someone at the start of their career may need to spend more on housing than an individual who is at a more advanced stage of their career and has paid off their mortgage. Either way, sticking to a specific number or percentage of income saved each month could be worthwhile over the long run.

Tips on making saving simpler

With it being possible to set up a direct debit to send money to a savings account as soon as it is paid into a current account, saving can be a simple and straightforward process. In many cases, individuals may not even notice the money has been taken out of their current account if it is done soon after their salary is paid in.

There are also a variety of apps which can be used to increase savings each month. For example, Moneybox rounds up to the nearest £1 on spending, with the amount being invested in a portfolio of shares for the long term. Chip, meanwhile, uses artificial intelligence to determine how much an individual can afford to save on a regular basis.


Deciding how much to save each month may not be an exact science. However, by considering savings goals, it may be possible to determine a worthwhile amount to save on a regular basis. For individuals looking for a simple means of determining the figure, the 50/30/20 rule could be a good place to start. Using direct debits and mobile apps may further ease the process and lead to enhanced savings over the long run.

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