How Much Should I Be Saving Each Month?

Saving money is more about habits than it is about income. The most widely accepted framework for personal finance is the 50/30/20 rule.

The 50/30/20 Rule

• 50% for Needs: Housing, utilities, groceries, and minimum debt payments.
• 30% for Wants: Dining out, travel, hobbies, and streaming services.
• 20% for Savings: Retirement contributions, emergency fund, and debt principal.

Why Savings Rate Matters Most

Your savings rate — the percentage of your income you keep — is the biggest predictor of when you can retire. A person earning $50k who saves 15% is often in a better long-term position than someone earning $150k who saves 2%.

The Importance of an Emergency Fund

Before you save for a house or a new car, you must have 3-6 months of expenses in a high-yield savings account. This is your financial insurance policy.

Plan all your goals at once with our Savings Goal Calculator.