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Saving money can spare you stress and help you reach larger financial goals. There’s just one question: exactly how much money should you save each month?

Finding the right amount is crucial for savers looking to balance short-term goals while planning for unexpected expenses and long-term savings. Understanding your current savings rate in these areas can help you adjust your goals in realistic ways.

But the right answer ultimately depends on your personal finances and outlook on savings. Keep reading for some tips to consider when making your monthly savings plan so you can achieve all your money goals.

1. Prioritize your savings goals

When deciding how much you should save each month, understanding your money goals is a good place to start. Here are a few savings goals you may want to work towards:

Creating a set of goals is the first step. Building an emergency savings fund can help you prepare for large, unexpected costs. Aim to save 3-6 months’ worth of expenses to ensure you’re covered in case of unforeseen circumstances.

What’s a realistic goal? Try our emergency fund calculator to find out.

Once you establish your goals, prioritize them and determine how much money you want to dedicate to each goal. Keep in mind your savings rate and monthly expenses.

Some people like using a bucket method, where each goal has its own “bucket,” and you prioritize which buckets you want to fill first.

It also helps to follow a budgeting rule like 50/30/20 to cover essential expenses, including mortgage payments and health care costs. Once one bucket (or group of buckets) is full, you move on to the next one.

If you have a certain amount of money to save each month, you might consider putting a larger amount into a big bucket and a smaller amount in a smaller bucket.

2. Try saving a percentage of your income

An easy way to establish a monthly savings plan is by choosing a percentage of your monthly income to dedicate toward your savings. One rule of thumb is to use the percentage method based on the 50/30/20 budgeting rule.

Here’s how it works. Take your after-tax monthly take-home pay and divide it up:

  • 50% for essentials/living expenses (housing, food, utilities, etc.)
  • 30% for discretionary spending (eating out, online shopping, etc.)
  • 20% for debt repayment and savings (paying bills, adding to your savings account, etc.)

Dedicating 20% of your income to savings is a common choice, but it doesn’t work for everyone. For example, paying toward student loans or credit card debt might take up a big chunk of that 20%. So, if you can put a little more money toward that percentage, that might make room for more savings. Focus on making high-interest debt payments first to improve your overall financial health.

See how these percentages work and adjust them to make the best financial decision for your budget and money goals. If needed, work with a financial advisor for personalized advice.

Grow your savings automatically with Round Ups* and Save When I Get Paid† to reach your financial goals faster.

3. Invest in your future self by saving for retirement

Whether you want to retire at 40 or plan to work until age 70, you’ll need some savings to live off of once you stop working. Here’s a really simple rule to remember about saving for retirement: time is on your side.

What does that mean? It’s simple: The sooner you start saving, the better, as you’ll have more time to capitalize on the power of compounding interest. This means the interest you earn on your interest. Your short-term savings contributions are helping you work toward long-term goals.

Here are some examples of how you can invest in your retirement:

  • Take advantage of your employer-sponsored 401(k) plan. Typically, your investment comes from your paycheck, which means you get a tax break. Better yet, some companies will match your contributions up to a certain percentage.
  • Open an individual retirement account (IRA). There are many types of IRAs, so it’s important to research and find the best retirement savings vehicle for you. As an added incentive, some IRAs are tax-advantaged.

Besides saving in these ways for retirement, consider using a brokerage account to explore more ways to invest your money.

4. Take advantage of automatic savings

Depending on your spending and savings account, you might have automatic savings features that can help you save money without trying! Here are a couple of benefits to look out for that can enhance your personal finance planning:

  • Save with each paycheck: You can dedicate a part of each paycheck to go right into your savings account when you use Chime’s Save When I Get Paid† feature. Toggle on this feature in your settings if you’d like to save part of your paycheck automatically.
  • Keep the change (in your savings!): Round up each purchase you make and put the extra cash in your savings. You can use Chime’s Round Ups* feature to put spare change in your account every time you use your Chime Visa® Debit Card.
  • Interest-earning accounts: Some bank accounts also let you earn interest on your balance. You’re getting paid just for keeping money in your account! Look at the interest rate to see how much you can make. For example, Chime’s savings account has a 2.00% annual percentage yield (APY).¹

Try out different features and savings tools to figure out what gets you excited about saving. Also, consider linking your checking account to your savings to facilitate easier management of your finances.

5. Do what works for you

From bucketing your money to experimenting with savings percentages, what’s most important is finding the savings strategy that works best for your financial situation. All of these factors can impact what amount of savings makes the most sense for you:

  • Your age,
  • marital status,
  • family responsibilities,
  • amount of debt,
  • and life goals.

And be gentle with yourself. Got a big raise or bonus? Set aside a little extra money for your savings. Had a job loss or had to tap into your emergency fund? Know that it’s okay to skip a month of adding to your savings.

With fluctuations in income and financial needs, it can be hard to predict everything. Being aware of your monthly savings is a great step toward handling the unpredictable and maintaining long-term financial stability.

6. Effective ways to save more money

Aiming for a comfortable retirement and managing monthly expenses require smart savings strategies. Here are a few tips to boost your savings.

  • Review and adjust monthly expenses: Regularly assess your monthly expenses to identify areas where you can cut back. This might include renegotiating bills or eliminating unnecessary subscriptions.
  • Get high-interest rates: Take advantage of accounts offering higher interest rates. This could mean moving your savings to a high-yield checking account or considering other investment options. Opting for a high-yield savings account can significantly boost your savings growth.
  • Set clear financial goals: Define your financial goals, both short-term and long-term. This can help you create a focused saving strategy, whether for an emergency fund, a major purchase, or long-term savings for retirement.
  • Contribute to an IRA: Regularly contributing to an IRA can be a powerful way to grow your retirement savings, thanks to its tax advantages and potential for compound growth.
  • Automate savings: Set up automatic transfers from your checking account to your savings account. This automation helps you save consistently without having to think about it. Consider a money market account as an alternative for your savings needs.
  • Evaluate and reduce high-interest debt: Paying off high-interest debt can free up more money for savings. Prioritize debts with the highest interest rates to reduce overall financial strain.
  • Increase savings with income boosts: Whenever you receive a raise, bonus, or any additional income, put a portion directly in your savings. This approach helps gradually increase your savings without significantly affecting your current lifestyle.
  • Seek financial advice: Consult with a financial advisor to tailor your saving strategies according to your personal financial situation and goals. They can provide insights on investment options, tax-saving strategies, and more.

By implementing these strategies, you can increase your savings and be better prepared for the future.

Take action to build your savings

Think about what these savings tips would look like for you. What do you think will help your financial independence?

Keep in mind there’s no one-size-fits-all monthly savings plan. Check out our savings goal calculator to start planning for long-term savings goals.

Monthly savings FAQs

Still thinking about how much you should save each month? Keep reading for some related questions and answers.

What’s a good amount to save per month?

Many financial experts recommend you save 20% of your income each month. What works best for you might be higher or lower and may change based on your financial situation.

Is saving 10% a month enough?

Any amount of savings is better than nothing. However, 10% a month might not set you up to reach your long-term financial goals, especially after retirement. If you need to, start at 10% and work to increase by 1% as you can.

What factors impact monthly savings?

Studies about average savings take the following factors into account: household size, education level, home ownership, and age, among other factors. These can all impact how much you save each month.

Chime® is a financial technology company, not a bank. Banking services are provided by The Bancorp Bank, N.A. or Stride Bank, N.A., Members FDIC. The Chime Visa® Debit Card and the Chime Credit Builder Visa® Credit Card are issued by The Bancorp Bank, N.A. or Stride Bank pursuant to a license from Visa U.S.A. Inc. and may be used everywhere Visa debit and credit cards are accepted. Please see the back of your Card for its issuing bank.

While Chime doesn’t issue personal checkbooks to write checks, Chime Checkbook gives you the freedom to send checks to anyone, anytime, from anywhere. See your issuing bank’s Deposit Account Agreement for full Chime Checkbook details.

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‡ SpotMe® for Credit Builder is an optional, no interest/no fee overdraft line of credit tied to the Secured Deposit Account. SpotMe on Debit is an optional, no fee service attached to your Chime Checking Account (individually or collectively, “SpotMe”). Eligibility for SpotMe requires $200 or more in qualifying direct deposits to your Chime Checking Account each month.

Opinions, advice, services, or other information or content expressed or contributed here by customers, users, or others, are those of the respective author(s) or contributor(s) and do not necessarily state or reflect those of The Bancorp Bank, N.A. and Stride Bank, N.A. (“Banks”). Banks are not responsible for the accuracy of any content provided by author(s) or contributor(s).

* Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your Savings Account.

Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your Savings Account.

1 The Annual Percentage Yield ("APY") for the Chime Savings Account is variable and may change at any time. The disclosed APY is effective as of September 20, 2023. No minimum balance required. Must have $0.01 in savings to earn interest.

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