If you've been carefully thinking about your financial goals, then go you! It's important to know what you’re working towards and how much you need to save. But the catch is that it can be hard to see a clear path to the finish line.
Realistically, you can only set aside so much money each month toward savings, and you want to balance a comfortable lifestyle with your savings goals.
Here's how to decide how much you can realistically save each month.
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How Much Will Your Budget Allow You to Save?
The reality is there's no one-size-fits-all way to save. You may make an entry-level salary but live in an expensive city. Or maybe you have dependents to care for, which limits how much you can save for yourself.
Everyone has different financial situations, which is why personal finance is so, well, personal!
A common rule of thumb for budgeting is the 50/30/20 rule, but it won't fit everyone perfectly. Still, you may want to use it as a starting point, and then adjust it for what's realistic for you.
How the 50/30/20 rule works
The 50/30/20 budget splits your after-tax income (aka the money you have available to spend or save) into three categories:
- Needs (50%): Essentials like rent or mortgage payments, insurance, utilities, and groceries
- Wants (30%): Things that make your life more enjoyable, like entertainment, travel, and dining out
- Savings (20%): Setting up an emergency fund, investing for retirement, and paying down debt
But saving 20% of your income is just a rule of thumb. You may need more or less depending on your specific savings goal. For example, 70/20/10 is often suggested as an alternative that's more in line with today's high cost of living.
If you aren't currently saving anything, start by saving 1%. Then, when you are comfortable with that, bump it up to 2% — then 5%, and so on. Any debt payments you are making also count towards this goal of 20%, so don't discount those.
Once you have a safety net and are debt-free, it will be much easier to save 20% of your income.
How To Increase Your Savings
If you want to save more money, you'll have to either spend less, earn more, or both.
So first, take a look at your monthly expenses and see where you can cut. Once you've done that, look into making more money.
- Cut expenses: If you want to save more, you need to critically examine how you are currently spending your money. Where can you cut unnecessary spending?
- Pay off debt: Paying off debt is the most powerful way to put more money in your budget.
- Set up autopay: If you've determined an amount you can save each month, set up automatic transfers so you don't have to think about it and don't accidentally spend the money.
- Examine your living expenses: Is there anything you can do to lower your basic living expenses? Moving to a smaller place or getting a roommate, for example?
- Look into earning more: Can you ask for a raise at work? Take on a side hustle? Or maybe even get a new job with higher pay?
READ MORE: How To Budget: 5 Simple Steps
Where To Keep Your Savings
You'll want to keep your savings in a high-yield savings account (HYSA), possibly even at a different bank than where you keep your checking account. This way your emergency fund is easily accessible, but not too accessible.
An HYSA is better than a traditional bank account because you'll earn interest on the money you put in there, so your savings can grow faster.
For example, the SoFi Checking and Savings Account earns a base rate of up to 3.30% APY, which is way higher than the national average for a traditional savings account — and right now you can also get a boost of 0.70% APY for six months on new accounts. (Terms apply.)*
If you are saving for a specific goal such as buying a car, you could consider a money market account.
These are like a cross between savings and checking. They pay higher interest rates but allow you to write checks from them. You could pay for your car straight from the money market account without having to transfer the funds to your checking account.
If you are saving for retirement, you'll want to keep those savings in tax-advantaged retirement accounts, such as a 401(k) or IRA.
If your employer offers a 401(k), you'll definitely want to sign up. If you don't have a 401(k) through work, you can still set up an IRA through an investment broker. There are even online brokers that are easy to get started with, such as Webull.
FAQs
Is $1,000 a month enough to save?
How much you can afford to save depends on your unique financial situation. For many people, $1,000 is an impressive amount to save monthly. If this is an amount you want to put away, take a hard look at your budget to see where you can cut expenses.
How much does the average person save a month?
According to a 2023 New York Life survey, American adults saved an average of $5,011 in 2022. That breaks down to a little over $417 each month. Remember, this is just an average. You should base your savings goals on what you can realistically save each month.
TL;DR: Set Your Monthly Savings Goal
The 20% savings rule is a good starting point, but don't stress if you can't hit it right away. Personal finance is personal. If you're not saving anything yet, start with just 1% and work your way up.
First, figure out what your budget can actually handle after covering your needs. Then boost your savings by cutting unnecessary expenses and paying off debt (which frees up cash flow). Set up automatic transfers so saving happens without you having to think about it.
Most importantly, put that money in the right places: high-yield savings accounts for emergency funds and short-term goals, retirement accounts for long-term wealth building.
The key is to start somewhere and build momentum. Your future self will thank you!
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* Annual percentage yield (APY) is variable and subject to change at any time. Rates are current as of 12/23/25. There is no minimum balance requirement. Fees may reduce earnings. Additional rates and information can be found at https://www.sofi.com/legal/banking-rate-sheet
* Earn up to 4.00% Annual Percentage Yield (APY) on SoFi Savings with a 0.70% APY Boost (added to the 3.30% APY as of 12/23/25) for up to 6 months. Open a new SoFi Checking and Savings account and pay the $10 SoFi Plus subscription every 30 days OR receive eligible direct deposits OR qualifying deposits of $5,000 every 31 days by 1/31/26. Rates variable, subject to change. Terms apply at sofi.com/banking#2. SoFi Bank, N.A. Member FDIC.
