How much of your income should you save each month? It’s a complicated question, and the answer often depends on a lot of factors that are unique to each individual. One of the standards for saving is the 50/30/20 rule. This guideline states that 50% of your monthly income should go to essentials, 30% should be for other spending, and 20% should be saved.

20% is a solid starting point, but it’s hard to use it as a blanket statement. Higher earners may be able to save a higher percentage of their money than someone who has to live paycheck-to-paycheck. Saving something is always better than saving nothing, so even if you can only save 5% or less each month, you’ll thank yourself when it finally comes time to retire.

Why Should You Save 20%?

20% is a good target to shoot for when you’re trying to save. It helps ensure that you’ll have a good sum of money saved up when you retire, thanks to the fact that you’ll get a better return the more money you save. You probably don’t want to have to work every day for the rest of your life. Saving as much as you can as early as possible ensures that you can retire on time, or maybe even early!

Even if 20% isn’t a lot for you, it’s nice to have money set aside for a vacation or emergency fund. In the end, you should save enough that your lifestyle is sustainable – and if your lifestyle isn’t sustainable you might need to reevaluate your spending.

How to Save Money

The easiest and lowest-risk way to save is to open a savings account. Oregonians Credit Union has a variety of savings options. Our Regular Share savings account pays competitive dividends and requires just $5 to open. Our club accounts help you save for special occasions like vacation and Christmas. These accounts pay higher dividends on deposits to help you save and reach your goals quicker.

Additionally, Oregonians Credit Union offers Money Market accounts that higher dividends and still maintain flexibility. They require a minimum balance of $2,500 to avoid a fee. This is a great option if you have money ready to save upfront. Meanwhile, our Share Certificates lock in at a competitive rate for terms from 1 month to 5 years. A share certificate is an account with a high return but the money can’t be accessed during the term period. It can be a profitable option if you’re able to put away a significant amount of money for a long period of time.

With our mobile app, your accounts will always be right at your fingertips wherever you are in the world!

What if You Can’t Save That Much?

We know that saving money isn’t realistic for everyone. Many people have debt or are living more lean than they would prefer. But saving is something you will thank yourself for later. Rather than immediately shooting for that 20% goal, start with just 1%. If you take home $1000 per month that’s only $10 you need to reserve for savings. Not so bad, right? Once you’re comfortable with 1%, scale it up. Even if you need to go one percent at a time for a few months, that’s better than nothing. Once you hit 5%, you’ll probably feel a major sense of accomplishment! From there, keep trying to go higher over time until you hit 20%. You might find that somewhere along the way you’re saving more than is comfortable for you, but you can always scale it back.

Now What?

Keep going and keep saving! Once you manage to save 20% each month, see if you can save even more than that. 30% is a fantastic target. If your goals are to buy something like a car or a house, college education for a child, or to retire early, you may want to try to save even more, like closer to 50%. If you can’t even get to 20% right now, that may seem impossible, but every little bit you can save will make it easier to afford those major life expenses or to retire early.

The best thing you can do is start saving right now. The earlier you start, and the more money you can put away, the more comfortable you’ll be when you finally retire. You can also get financial guidance from one of our member engagement officers. Visit our contact page or email to get in touch with our Financial Guidance Service. We’ll be happy to help!