Managing your finances can seem like a puzzle sometimes. There’s money that goes out and money that comes in that you need to manage. When it comes to becoming more financially secure, saving enough money is key. So how much should you save each month?

This really all depends on a variety of factors. Most financial experts say you should save at least 10% of your income while others recommend saving around 20%. Then, there’s the type of things you can save for whether it’s for your emergency fund or short-term spending.

To truly narrow down how much you should save each month, I recommend asking yourself these 4 key questions.

1. Why Is Saving Money Important to Me?

It’s important to ask yourself why you’d want to save money in the first place. Most of the time, we save money for our future goals so it’s key to narrow down what some of you’re financial goals are.

Do you want to retire at age 50? Are you looking to buy your first home? Do you need to save money for a rainy day?

Feel free to get as specific as possible and narrow down your short-term and long-term goals. Then, prioritize them based on what’s most important right now. How much would saving for your top 2 to 3 goals require you to contribute each month? Maybe it’s $500. Maybe it’s more or less. Nevertheless, doing this exercise is a great starting point.

2. Do I Have a Realistic Budget

Your budget is one of the best tools to help you determine how much you can save each month. Keep your budget realistic by tracking all your expenses and listing out how much you earn vs. how much you spend. The goal is to make sure there is a gap between the two and something left over so you can save.

So if you’re wondering how much should you save each month, your budget could be a key guide in helping you determine this. Realistically, your budget may allow you to save a smaller amount of money. This is fine to start with because you’ll build a habit of prioritizing saving.

Over time, as your income increases or you have a few windfalls, you can focus on keeping your expenses fixed so you can save the excess.

3. How Secure is My Income?

Still wondering how much should you save each month? One of the most important things people save for is future income replacement. If you lost your job today or tomorrow, would you have enough savings to make ends meet? If the answer is no, you’ll want to start budgeting for some emergency fund savings.

Many people have jobs that provide a variable income. Or, perhaps you’re in a field where the work is seasonal or layoffs are common. These are all good enough reasons to boost your savings rate. Aim for saving around 30% of your income if you are looking to build an emergency fund sooner rather than later.

4. Am I Willing to Become More Frugal?

Maybe you’ve come up with a number that you need to save but aren’t sure how you’ll manage to set that amount aside each month. You may need to consider how you can become more frugal and cut some expenses to free up more money for saving.

Being frugal doesn’t mean you have to give up everything you love or become extremely cheap. Frugality simply means that you’re willing to be resourceful and save money in certain areas of your budget that may come naturally to you.

For example, being frugal might mean meal planning a few delicious recipes for the week instead of ordering takeout. Or, it could mean using retailer coupons to order back-to-school clothes for your kids. Another great frugal habit could be earning credit card rewards points to help you save on a vacation. By embracing ac frugal lifestyle, you’ll be able to save more money each month and meet your other goals.

Summary: How Much Should You Save?

When it comes to determining how much you should save each month, there is no one-size solution for everyone. It solely depends on your goals and unique situation. A good place to start is by saving 10% of your income. After you get comfortable with that, see if you can increase it to 20% or even reach a more aggressive savings rate. If you feel you want to save more money, consider adopting a frugal lifestyle so that saving more won’t be such a huge strain.

What percentage of your income do you save?

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