Download My FREE Income Ideas Cheat Sheet!
Make. More. Money. Join 15,000+ subscribers learning how to boost their income and take control of their finances.

Don't worry – we hate spam too. Unsubscribe at any time.

What Percent of Income Should I Be Saving?

By Forrest | Last Updated: December 19, 2019

What Percent of Income Should I Be Saving?

We get asked this question a lot. And it’s hard to pinpoint one single answer. The amount of money you should be saving is completely dependent on your financial situation and your goals.

For example, those who make $500,000 annually should be saving more than those bringing in $50,000 annually.

In order to determine what percent of your income you should be saving, we’ll ask a set of questions to help guide your answer. But there are a few things that apply to everyone:

  1. You should be saving!
  2. Whenever you think you have enough, keep saving.
  3. You can never have too much in your savings.

What is your income?

To decide what percentage of your income you should save, you should first know how much you make. Those who make larger amounts should plan to save more.

If you make more than $100,000 you should aim to save at least 20% of your post-tax income.

If you make between $50,000 and $99,999 you should aim to save 15 to 20% of your post-tax income.

If you make less than $50,000 annually, you should aim to save at least 10% of your income.

Keep in mind that the more you save, the better off you’ll be, so always try to maximize your savings.

What are your expenses?

When determining how much you need to save, your expenses will play a large role. Those with large monthly expenses might need to save more than those who live frugally.

If you spend more than 50% of your income on monthly expenses, you’ll need to be saving more than others.

What are you saving for?

What you are saving for will also affect how much you should be saving. If it’s for your retirement fund, you might want to save more than if it’s for a brand new car. Some of the most common reasons for saving are listed below

  • Retirement
  • Emergency Fund
  • Kids College Fund
  • Home Renovations
  • Debt Payments
  • Other Large Purchases

What are your financial goals?

Do you want to live comfortably without having to worry about your finances ever again? You should probably be saving more than someone who is okay with their current financial situation. Know your goals and adjust accordingly.

How much time do you have to save?

The longer you have to save, the more interest you can rack up, therefore allowing you to save less to reach your goal. For example, if you’re trying to save $1,000 and you have 20 years to save, you’d only need to save around $4.15 per month in order to reach your goal. If you only had 2 years, you’d need to save around $42 per month. Add in the advantages of compounding interest and it will exponentially decrease the amount you’ll need to save to reach your goal.

If your goal is to retire early, you’ll need to save more than those looking to retire at the normal age of 65. Keep this in mind when deciding how much you should save.

Consider your budget

Savings should be built into your budget. If you notice that at the end of the month, you have nothing left over to save, you could run into some troubles. Try revising your budget and lowering your expenses so that you can allocate more towards savings. It might be easier to start off your budget by allocating to your savings and then figuring out where else you can cut back.

Always Remember Saving Something is Better than Saving Nothing

If you are unable to save more than 10% of your income, this doesn’t mean you should scrap your savings altogether. Save as much as you possibly can, even if you aren’t close to what’s recommended. If you can’t find room in your budget, it might be a good idea to pick up a part-time job or find another small source of income that you can dedicate to your savings.

How to Save More Money

A common problem among many people is they simply aren’t saving enough. There are many ways you can save more. Here are

Automatically Contribute to Savings

If you have trouble controlling your spending, consider having some of your paycheck automatically deposited into a savings account. This can force you to save more than you typically would as your checking account might have a little less at the end of each month. Just be sure not to transfer that money back into your checking account!

Round-Up Small Purchases

There are many apps that will round up any of those small purchases to the nearest dollar. That 23 cents might not mean anything to you at the time of purchase but can add up over a few months.

Some of the best apps for rounding up small purchases and automatic saving are:

  • Acorns – automatically rounds up purchases AND invests that money for you.
  • Chime – automatically rounds up purchases AND offers the ability to get paid a few days early
  • Qapital – allows you to select goals and helps you to save to reach those goals

Lower Monthly Expenses

There are many ways you can lower your monthly expenses to contribute more to your savings. Cutting the cable, ditching the car payment, and saving at the grocery are just a few ways you can lower your monthly expenses. Be sure to read our post to learn 13 ways you can lower your monthly expenses here!

Find Small Sources of Additional Income

It’s time to search the house for all that spare change or consider having a yard sale. While this income won’t be reoccurring, it’s a good way to pad your savings during, especially stressful months financially. If possible, find other ways to bring in additional income, even if it’s only a hundred bucks a month or so. This money can start to rack up your savings.

Where Should I Put My Savings?

Now that you’ve determined how much you should aim to save, the question becomes “Where should I store my savings?” Ultimately, this will depend on what you’re saving for. If you are saving for retirement, you’ll want to put that money into a 401k or IRA. If you’re saving for an emergency fund, that money should go into something much more stable like a traditional savings account.

We’ve put together a chart to understand where you should store your hard-earned savings.

ReasonWhere to Store

Retirement 401k or IRA
Emergency Fund Savings Account
Home Renovations within 1 Year Savings Account
Large Purchase in 5 Years CD or Mutuel Fund
College Fund Education Savings Account (ESA) or Education IRA


Saving money is a necessity, and most people know this. Where people start to go wrong is by guessing how much they should be saving. To start, it’s wise to save around 15 to 20 percent of your post-tax income. Put this money in a safe space, like a savings account or certificate of deposit (CD) so there is less risk of losing it.

To boost your savings, try automating your savings and using apps that round up small purchases for you. If possible, try to find an additional source of income so that you can pad your savings, helping you reach your savings goal faster.

No matter what your goals are, or how much money you have, you should always be saving. You can never be over-prepared for what life throws at you financially, so start saving now!

What are your best tips for saving more money? Comment below!

Forrest is a personal finance, entrepreneurship, and investing enthusiast dedicated to helping others obtain life long wealth. He owns several different blogs and is also passionate about health and fitness.
Download My FREE Income Ideas Cheat Sheet!
Make. More. Money. Join 15,000+ subscribers learning how to boost their income and take control of their finances.

Don't worry – we hate spam too. Unsubscribe at any time.