How Much Should You Save Each Month? A Simple Guide for Gen Z
“How much should I actually be saving each month?”
It’s one of the most common money questions—and for good reason. Between rent, groceries, subscriptions, and trying to live a little, saving can feel impossible.
The good news? You don’t need to save perfectly. You just need to start saving consistently—even if it’s a small amount.
This guide breaks down exactly how much to save, how to adjust based on your income, and simple ways to make it stick.
How Much Should You Save Monthly? The Short Answer
The general rule of thumb is:
📌 Save at least 20% of your income each month.
This comes from the popular 50/30/20 rule:
• 50% to needs (rent, groceries, bills)
• 30% to wants (fun, shopping, takeout)
• 20% to savings
💡 If 20% feels impossible right now, don’t panic. Start with what you can—even 5% is progress.
What Counts as “Savings”?
Not all savings are created equal. Here’s what goes into that 20%:
✅ Emergency fund – For unexpected stuff (car repairs, job loss)
✅ Short-term savings – For trips, tech upgrades, or moving
✅ Long-term savings – For retirement, investments, or future goals
✅ Paying off high-interest debt – Yes, this counts as saving
💡 Saving = anything that improves your future financial situation.
How to Know What You Should Save (Based on Your Income)
A good starting point is to aim for 5% to 20% of your monthly income, depending on what’s realistic for your current situation.
Here’s a simple breakdown:
• If you make $1,500/month, saving 5% means putting aside $75, and 20% would be $300.
• If you make $2,000/month, saving 10% would be $200, and 20% would be $400.
• If you make $2,500/month, even saving 5% gets you to $125/month.
The exact number isn’t as important as getting consistent. Start small, build the habit, and increase over time as your income grows.
💡 Pro tip: Set a savings percentage that feels doable now—then automate it so you don’t have to think about it.
How to Save Money When You Feel Broke
Saving when your budget is tight can feel impossible—but it’s doable with the right approach:
✅ Automate it
Set up an auto-transfer on payday. Even $10/week adds up.
Out of sight = out of mind = saved.
✅ Start a “No-Spend” Challenge
Try one weekend or week per month. Put what you would have spent straight into savings.
✅ Save your side hustle money
If you’re freelancing, driving for DoorDash, or flipping stuff online, commit to saving a percentage of that extra income.
✅ Round up purchases
Apps like Acorns and Qapital automatically round up your purchases and save the change.
Where Should You Put Your Savings?
Put your savings in a place that’s:
• Safe
• Separate from your checking account
• Earning a little interest (if possible)
Best options:
🔹 High-yield savings accounts (like Ally, SoFi, or Capital One 360)
🔹 Cash stuffing envelopes for visual savers
🔹 Separate savings buckets in apps like Daddy Money
Avoid keeping your savings in cash or in the same account you swipe from daily. That money will disappear.
What If Your Income Changes Every Month?
If you freelance, gig, or work inconsistent hours, base your savings on a percentage, not a fixed number.
💡 Example:
• Save 10% of every deposit, whether it’s $100 or $1,000
• Use a budgeting app that adjusts in real time
• Prioritize emergency savings when your income is high
Set a Monthly Savings Goal That Fits Your Life
Forget perfection. Focus on progress. Start by asking:
• What are you saving for?
• How much time do you have?
• What can you realistically set aside each month?
Then build your plan around that—not some random number from a finance bro’s Instagram.
Final Thoughts: It’s Not About How Much, It’s About Starting
Whether it’s $20 or $200 a month, saving is about building the habit first. The amount will grow as your income grows and your habits stick.
You don’t need a finance degree to start saving. You just need a system that works for you.
Start small. Save consistently. Watch your money confidence grow.
