Determining What Your Monthly Savings Goal Should Be | Cleveland Bradley County Teachers Federal Credit Union

Though saving money is a goal we all have, determining how much to save can be a tricky thing. The 50/30/20 rule is a popular savings strategy, but saving 20% is not always the best route for every financial situation.

The origins of the 20% rule come from the target of achieving financial freedom for retirement, but depending on your income, debt repayment strategy and other factors, there are other things to be considered. So, how much should you plan to save each month?

How to Determine Your Monthly Savings Goal

Think through what you’re saving for. Understanding what you are saving for can help you put your goals in perspective and make sure you have a clear understanding of how much you need to reach your dreams. Whether you want a lavish retirement in a different country or a quieter life close to home, knowing what your end goal is can help you keep your final dollar amount in focus so you can work backwards to get there.

Remember something is better than nothing. When it comes to building your savings goals, anything is better than nothing. If 20% is not a goal you can consistently hit, try to not get too hung up on it—adding anything to your savings account will help you grow them over time, and hopefully you can take advantage of compound interest while you are at it.

Make sure you’re able to make your payments. While having an emergency fund is a top priority, it is also important to prioritize your payments for any debts you carry, such as student loan repayments, car loans, and a mortgage or rent. Balancing all of these things with building your savings can be tricky, but because making late payments can have such an outsized impact on your credit score, it is important to keep this in mind.

Get creative with your savings. While finances can be a personal thing, ultimately, every dollar you do not spend on one thing is a dollar you have to spend elsewhere—so if you decide your ideal savings goal may not be feasible under your current circumstances, it may be fun to get creative and see where you can tighten the budget to reroute to your goals.

If you need help building up your savings, we have the accounts to assist you! Get in touch today to learn more about our checking and savings options.