How Much Should You Be Saving a Month?

savingsIn 2011, Eric and I saved an average of 8% of our total take home income every month.

In 2012, we saved 6.5% of our total take home income every month.

This year, we are on target to save more than 20% of our take home income every month.

The biggest reason for this change is that we’re now making more money than we have been in the past few years.




We have definitely upgraded our lifestyle:

  • we moved from the shack into a two-bedroom townhome
  • we have traveled to Costa Rica, New York, San Diego and San Francisco in the past 8 months
  • I let Eric order the soccer channel on cable! (That’s $10 a month! or $120 a year)
  • we have a cleaning lady
  • we don’t hesitate in spending over $100 on a night out with friends (we go out maybe once a month, rarely twice)

But we’ve also paid off more than $17,000 in debt this year.

Our biggest goals now are to save, save, save for a down payment on a house and for a car. So I’m really happy that we’re making traction in those arenas.

While saving 20% is doable now, I wonder if it will be the same when we have to pay for childcare or have a mortgage.

There are some people that are able to save 50% of their take home income. Kudos to you! When Eric finally gets his firefighter job, I hope we’ll be able to save 30% of our income, if not more.

But once we actually do buy a house, the extra savings will most likely go toward the mortgage payment, taxes, and maintenance.

So I wonder: what is your regular rate of savings? What amount or percentage do you strive to save each month?

20 thoughts on “How Much Should You Be Saving a Month?

  1. July 18, 2013 at 4:16 am

    Awesome on getting from 6.5% to 20%. My wife and I save ~50%. Our goal is to get to 60%, but it’s hard because we’re in a more expensive house. We may try to downsize soon.

    Childcare costs are also kicking our butt, but that should go way down once our second one enters school.

  2. July 17, 2013 at 1:34 pm

    We save about 25% of our take home on an annual basis, excluding retirement savings. The month-by-month amounts vary quite a bit because we have some non-recurring expenses, but it should be 25% at the end of the year. We’re also trying to save for a house now. if we save at this rate for 3 years, we’re hoping to have 20% downpayment on a starter home.

  3. Nairobi
    July 17, 2013 at 11:22 am

    We’ve been saving 40-60% a month based on % Income:Saving. It was less in the beginning 10% , coz we paid off some debts- and maintained the same lifestyle

    The biggest lesson that we learned was that of budgeting. Many will always talk about it, just like we did. In fact, some people budget when they are broke- and surprisingly it does work with some stress. Do

    The best thing to do is to cut down living expenses as humanly possible-either by reducing the dollar value or the frequency of a purchase or eliminating the expense altogether or do a task yourself eg. cut yr hair or paint you nails (see youtube). Secondly, live on one paycheck or if you are single, save your side hustle or use it to pay off all debt first.

    You start seeing results in about 6 months. We have budgeted for nearly two years, my wife did not work for a year, and once she started working we save everything including tax returns- We have 40K saved up , of which 10K will start funding a downpayment of 20%.

  4. July 17, 2013 at 8:03 am

    I’m doing terrible with savings. Since I’m mostly focused on paying down debt, and I’m young, I’ve barely been doing any saving at all! I plan on being debt free by October though, so after that, I’m going to be doing some big time saving.

  5. July 17, 2013 at 4:42 am

    We tried doing a percentage in the beginning and it worked. It was to save 20-30% of our income. Then we bought a home, now we have daycare, my younger brother now lives with us…etc. Now we have a set number that we focus on saving every month. As things come up its hard for us to adjust if we keep it as a percent of income when things are increasing faster than income. We actually started with doing the budget backwards: savings, 401k, monthly savings etc. Than we focused on what we would spend on other things. That worked but now our mortgage is more than what we paid for rent and Twinkie is starting daycare and thats anoter 1k per month. Time for me to get on those side hustles to increase income. Do what works for you. Right now you don’t have kids so set a percentage. When other things come up it maybe be easier to do a specific number.

  6. July 16, 2013 at 12:08 pm

    My work automatically puts $500 in a tax free account and distributes it to me every 3 months. So, that’s my bare minimum but I always add to it with side hustle income etc.

  7. Jessica
    July 16, 2013 at 7:31 am

    Congrats! That seems like major improvement I hope I can be at the same position a couple of years from now, like you I also have a hubby who is trying to move up in his field after being unemployed 2 years!! he took a leap of faith on a entry level job with barely over min wage because it was in a field he loves(logistics), BUT I am super excited that his review is in 10 days and that he will hopefully see a bump in his checks.. I can’t even save a dime at this moment because we barely break even!! any tips on how to deal with this stress!?!?!

  8. July 15, 2013 at 7:21 pm

    CB is saving around 30% of his gross income in retirement (that includes a 10% employer match). I’m saving around 20% of my gross income this year, all to the Roth IRA. I hope that when I graduate and we are back to being DINKS, we can save 50% of gross income because we’ll need to hustle hard and buckle down for a down payment.

  9. July 15, 2013 at 5:12 pm

    Since our income fluctuates, our savings rate goes up and down as well. Last month, we saved at 75 percent of our gross income. This month, we are saving less because we are going on vacation the last week. It just depends but overall I would say we save 50 percent.

  10. July 15, 2013 at 4:59 pm

    Nice job Erika!! It’s impossible for me to say what the number will be each month. It depends on how well I do with freelance income. But I strive to save 10% of each and every job no matter how big or small that comes in.

  11. July 15, 2013 at 12:41 pm

    I’m not to that stage yet to focus on savings. Unless we want to call my deferred/planned future spending a savings account. The percentage would be minimal if that. Not enough income to play around with when paying for debt full strength.

  12. Katy
    July 15, 2013 at 11:41 am

    I had to calculate it out LOL! My husband and I save 20% towards retirement (we both max out our Roth IRAs and 401ks) but we try to save another 20% in cash. At the very minimum, we save $1,000 a month because i get anxious if we don’t!!!

  13. July 15, 2013 at 11:27 am

    Right now I am only saving 4% of my net income but that’s because I’m aggressively paying down debt. Congrats on paying off $17,000 of debt this year. That is fantastic!

  14. July 15, 2013 at 10:49 am

    Mr PoP’s income is variable, so it can change a good amount from month to month. But in 2012, we saved about 50% of our gross income (so the before tax amount). That felt pretty awesome, so we’re hoping for a repeat, or if not to aim for at least 50% of net income amount. We like the satisfaction of knowing we’re living off just one person’s income.

  15. July 15, 2013 at 9:48 am

    It’s so difficult to know how much to save even when you have well-defined goals because there is always RETIREMENT! We just save as much as we think we comfortably can, which I suppose is a mistake for most people but for us is 17% so I think that’s not bad. I think if we got to 20% I would call it a day and not even think about it any longer.

  16. July 15, 2013 at 8:39 am

    We are saving a decent amount every month. However, once I quit my job, our savings rate will fall, but it will still be around 50%, which I am of course fine with.

  17. July 15, 2013 at 8:37 am

    20% is fantastic! Does that include retirement savings? With 401k, we’re probably at about 18%, but I think we should step it up!

  18. July 15, 2013 at 8:36 am

    I’m not so sure I even want to do the math on it. I basically did our budget starting backwards with bills and then from what we had left over determined what we could contribute to savings. We should probably be saving more.

  19. July 15, 2013 at 8:23 am

    We are trying to save about 50% of our income. It’s definitely not easy, and I’m not sure we’ll be able to keep it up once we buy a house. Hopefully, we will. But I, also, hope we are able to loosen up the strings, and buy more experiences all within reason.

  20. July 15, 2013 at 8:01 am

    I was able to save about half of my income the past three years but I didn’t have a mortgage or a car or really any major expenses. i didn’t make a ton of money but I got it so I had so little expenses that I could afford to save half. But I know once I own a place that may not be so doable.

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