July 16, 2024
Want to build a healthy savings account but not sure where to start? We've compiled expert advice and actionable tips for setting savings goals, creating a budget, building an emergency fund, and celebrating small wins along the way.


Saving money can seem like a daunting task, especially if you’re just starting out or struggling to make ends meet. Without a clear savings goal, it’s hard to know how much money you should be setting aside each month. In this article, we’ll explore different approaches to determining your savings goals and provide actionable steps to help you reach them.

The Golden Rule Approach

One widely-accepted guideline for how much money you should have in savings is to aim for six months of living expenses. This means that if your expenses for rent/mortgage, utilities, transportation, groceries, and other bills total $3,000 a month, you should aim to save $18,000 in an emergency fund. This will give you a financial cushion in case of unexpected emergencies or job loss.

While this rule of thumb can be a good starting point, it’s important to consider your individual needs and circumstances. For example, if you have a stable job with good benefits, you may be comfortable saving less than six months’ worth of expenses. On the other hand, if you have dependents or a chronic health condition, you may want to aim for more than six months’ worth of savings.

Calculating your six months worth of expenses is a crucial step in this process. To calculate your monthly expenses, take a look at your bank statements, bills, and receipts to determine your typical monthly expenses. Then, multiply this amount by six to get your target savings goal.

Expert Advice

Financial experts typically recommend saving 20% of your income, but that may not be a feasible goal for everyone. Factors such as debt, job security, and lifestyle can all affect how much you’re able to save each month. However, experts suggest that having at least three to six months’ worth of expenses saved up is a good starting point.

Another useful guideline is to aim to save 10% of your income for retirement. This can seem like a daunting task, but starting early and saving consistently can make a big difference over time. If you’re not sure where to start with retirement savings, consider meeting with a financial advisor to determine the best approach based on your individual needs.

Budgeting Strategies

Creating a budget can be a helpful tool for maximizing your savings potential. Apps like Mint or You Need a Budget (YNAB) can be useful for tracking expenses and identifying areas where you can cut back. Additionally, setting short-term goals can help you stay motivated and committed to your savings plan.

To adjust your spending habits, consider cutting back on non-essential expenses like eating out, buying new clothes, or subscription services. Instead, prioritize spending on essentials like rent/mortgage, utilities, and groceries. By making small changes to your daily habits, you can save hundreds or even thousands of dollars each year.

Celebrating Small Wins

Saving money is a marathon, not a sprint. It’s important to celebrate each milestone, no matter how small. Celebrating small wins can help you stay motivated and build momentum for long-term success.

To celebrate your achievements, consider treating yourself to a small reward or sharing your success with a friend or loved one. Celebrating your hard work can help you stay on track and maintain a positive attitude toward your savings goals.

Emergency Savings

Having an emergency fund is crucial for financial stability. Without one, unexpected expenses like car repairs or medical bills can quickly derail your budget. Experts recommend having at least $1,000 in an emergency fund, and ideally three to six months’ worth of expenses.

To start building your emergency fund, consider opening a dedicated savings account and setting up automatic contributions. Even if you can only contribute a small amount each week or month, consistent saving is key to building a healthy emergency fund.

Goal-Based Savings

Setting specific savings goals can be a helpful tool for staying motivated and focused. Whether you’re saving for a down payment on a house, a new car, or a dream vacation, breaking your goal into manageable milestones can help you achieve success.

To set specific savings goals, consider using a spreadsheet or savings calculator to determine how much you’ll need to save each month to reach your target. Once you’ve determined your goal, set deadlines for each milestone to help you stay on track.


In conclusion, determining how much money you should have in savings requires careful consideration of your individual needs and circumstances. Starting with the rule of six months’ worth of expenses is a good starting point, but it’s important to adjust this guideline according to your situation. Additionally, creating a budget, celebrating small wins, and setting specific savings goals can all help you achieve financial stability and build a healthy savings account. Remember, saving money takes time and dedication, but the benefits of financial freedom are worth the effort.

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