How much should we be aiming to save each month?

Megan Sutton
·6 min read
Photo credit: Hearst Owned
Photo credit: Hearst Owned
Photo credit: Hearst Owned
Photo credit: Hearst Owned

Let’s face it, saving money isn’t exactly the most fun thing ever when chosen over, say, a Glossier haul, but getting into the habit can eventually bring us financial wellness and freedom that’s ultimately just as satisfying as a new tube of Boy Brow.

But getting to that point requires an understanding of why we’re saving, and often times, it’s motivated by a stressful situation rather than being a part of our everyday lives.

“I love saving but I think the root cause of that is fear. I spent most of last year worrying about money as I was on furlough on my two days a week retail job (around £75 a week). So, when I finally got a full-time job in November I went full throttle, making spreadsheets, setting up direct debits to save, and now I panic I'm really far behind on saving compared to most of my peers who've been working full time for two+ years,” says Kirstie.

For others, saving just isn’t on the agenda at all.

“I’m on a decent wage and living up north so rent etc is fairly cheap (I only pay £625 for a two bed flat with a car parking space) but because saving for a house seems so out my league I kind of just don’t bother,” Molly told us. “Whilst I’m in my twenties and only have myself to be financially responsible for I’d much rather spend cash on cool experiences with my friends than put it away for a rainy day. I know that’s probably quite foolish but I can’t say no to fun plans!”

Whether you’re feeling panicked like Kirstie, or unconcerned like Molly, there are ways you can get into top-notch saving habits that serve you all the time, not just when you need some extra cash.

“Saving is a habit… in order to get used to that habit and make it a lifestyle, you have to make it an everyday part of your routine - whether that’s daily saving, weekly, or monthly - it has to be something you do regularly so when life changes happen and you need to kick up your savings, it doesn’t feel uncomfortable,” says Personal Finance Guru and Founder of Pennies to Pounds, Kia Commodore.

Emilie Bellet, Founder of VestPod, host of The Wallet podcast, author of You’re Not Broke, You’re Pre-Rich, puts it this way:

“If you go for a run every day, you may be able to eventually run a marathon, but if you never run and you injured yourself and then someone tells you you have to run a marathon tomorrow, it's going to be impossible. I think it's the same with money.”

How much should you save a month?

While Kia recommends saving as much as possible, this of course depends on individual circumstances.

“I would definitely encourage people to save at least 10% of their income each month, if possible. If you can save more then absolutely save 20%, 30%, but I think the bare minimum everyone should try to always save is 10% of their income each month,” she says.

Emilie agrees that it’s a unique situation for everyone, so doesn’t think we should get hung up on any rules. She stresses the importance of making sure you have an emergency fund as the main thing to work towards.

Photo credit: Tooga - Getty Images
Photo credit: Tooga - Getty Images

“In terms of how much you should have in savings, the general rule of thumb is about three to six months of wages but again it depends on people’s circumstances,” Kia says. “I’d probably look to have at least three months of living expenses like rent, just in case something happened.”

“Financial advisors will tell you that you need three to six months of living expenses in an emergency fund. That's a lot of money, and most people feel: ‘That's too much. I don't even know where to start so I'm actually not doing it,’” Emilie says.

Start small

“I would definitely start now and start with whatever you can, even a few pounds a month - just getting into the habit of saving and proving to yourself that you can do it. In time this can increase five pounds a month, then 10, 50 and 100, and you get into the habit," Emilie advises.

“It's like you set yourself mini challenges, and you're not going to get to three to six months of living expenses in a month - it's going to take you months or years, but make sure you have this little pot of money that's available anytime," she adds.

Photo credit: Richard Drury - Getty Images
Photo credit: Richard Drury - Getty Images

Kia agrees that starting small is definitely worth it.

“It takes 21 days to develop a habit and 90 days to develop a lifestyle so if you get into the habit of saving small amounts, when your income does increase, then putting away slightly larger amounts won't feel as foreign to you because you're so used to putting away money and not looking at it, that you're able to increase it. Savings are about having a goal so it's just about starting small and working your way up.”

Top tips for saving from Financial Guru Bola Sol

Do an audit

“Go through your bank statements and cancel any [direct debits] you no longer use,” says Sol. It’s also easy to get caught out on free trial offers that automatically charge you after the ‘free’ period ends, so put a reminder in your diary to cancel them unless you really think they are worth paying for. “If there are services you genuinely get value out of, save money with family or group subscriptions. Spotify costs £14.99 for six people living under the same roof,” Bola says.

Boss your bills

“You don’t necessarily have to switch providers,” advises Bola, “just call your provider and ask them to match a deal you have seen elsewhere - haggling can work. If they don’t, then switch, as it will save you a lot of money over time.”

Be loyal

“Over time loyalty cards can help with money off, and if you shop there anyway, then why not?” says Bola. “Tesco Clubcard, for example, gives members special prices on selected products which change weekly.”

Don’t double up

“Before you shop, see what you have first, because constantly buying duplicate items is a waste of money,” advises Bola.

Start stashing

Once you’ve followed these tips and have a bit of extra cash in the bank, make sure it’s in an account that pays interest. Rates aren’t great at the moment, but interest is essentially free money. If one bank has a savings account offering 0.1% while another will give you 1% of your balance back, choose the latter. “Something is better than nothing,” says Bola.

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