No matter how much income you earn, saving money is essential to your long-term financial success.

The median balance Americans hold in transaction accounts (e.g., savings accounts, checking accounts, etc.) is $8,000, according to the most recent data available from the Federal Reserve. Yet whether you have more or less cash tucked away than the average household, it’s important to evaluate if you have enough money set aside to meet your needs.

Of course, figuring out how much money to save each month may require some trial and error. Saving money looks different for everyone, and financial goals vary depending on personal circumstances. Nonetheless, there are recommended guidelines that may help you get started.

For example, experts often recommend saving at least 20% of your income each month. But there can be some exceptions to this rule. Here’s what you need to know.

Read more: What is the average savings by age?

How much should you save each month?

Like many financial topics, figuring out how much money you should save each month is a personal decision. Many factors can affect your monthly savings goals, including the following:

• Your income

• Your age

• Debts you owe

• Monthly expenses

• Your savings goals

• Money you’ve already saved

If just starting out on a money-saving journey (or you haven’t been saving for a while), you might want to consider trying the 50/30/20 budget. This money management strategy recommends dividing your income into the following spending categories: 50% on needs, 30% on wants, and 20% on savings and debts.

For example, let’s say you take home $5,000 per month after taxes and other payroll deductions. In this case, you would aim to spend $2,500 on essential expenses (rent or mortgage, utilities, debt minimum payments, food, etc.) and $1,500 on discretionary expenses (personal care, dining out, entertainment, etc.). The final $1,000 would go toward your savings and/or extra payments on debt.

Keep in mind that if you’re struggling to make ends meet, this type of budget might not work for you. While it’s still possible to save money on a tight budget, another approach may be better for your situation.

For instance, you might want to consider a zero-based budget instead. This option allows more flexibility when it comes to savings and spending goals rather than imposing broad categories and specific percentages. And if you can afford to save more money, a zero-based budget gives you the freedom to put away more cash toward future financial objectives as well.

As mentioned, your ideal savings rate depends on the savings goals you set for yourself. It also depends on when you want to reach your financial objectives.

Let’s say you and your spouse want to have six months' worth of essential expenses set aside in an emergency savings fund by the end of the year. If your essential household expenses add up to $2,500 per month, the two of you would need to save $15,000 to reach your goal. Assuming you allow 12 months to save that amount, you would need to save $1,250 per month to fully fund your emergency savings account.

Read more: How to save money in 2024: 44 tips to grow your wealth

What to do if you’re behind on your savings goals

When it comes to savings goals, especially large ones like retirement, it’s not uncommon to feel like you’re playing catch up. Financial experts recommend having six to 10 times your income saved for retirement by the age of 60. Yet in reality, many Americans are unprepared or underprepared. The median retirement savings for 55-year-old Americans is less than $50,000, according to Prudential Financial’s 2024 Pulse of the American Retiree Survey.

Of course, it doesn’t matter so much how you measure up in comparison to others when it comes to your savings goals. The details that are most important are whether you’re making steady progress toward your own financial objectives.

If you feel like you’re behind on your savings goals, here are some tips that could help you start to catch up.

1. Update your budget

When you’re not making the progress you want toward your financial goals, often one of the best places to start is to take an honest look at your budget.

If you find ways to reduce your spending or boost your income, you may find that setting aside money for retirement, a college fund for your kids, a down payment on a home, or whatever else you want to save money for becomes easier to manage.

Read more: What is a no-spend challenge, and is it right for you?

2. Pay down high-interest debt

Credit card debt and other debts with high interest rates can hold you back when you’re trying to save money. If you currently owe these types of debts, it’s important to build a plan to pay them down as soon as possible and aim to avoid creating new high-interest debt in the future.

Keep in mind that you don’t need to be debt-free before you start saving money. Building an emergency fund and saving a modest amount toward retirement could still be wise even while you’re working to pay off high-interest credit card debt and loans.

If you’re not sure how much you should save while you’re working to pay off your debt, consider talking to a reputable financial adviser to develop a plan that works for your situation.

3. Increase retirement account contributions

As you free up extra money by updating your budget and paying down debt, it’s important to use those funds wisely. One strategy to consider is investing more money in an employer-sponsored retirement account or an individual retirement account (IRA).

If you have an employer-sponsored retirement plan, it’s generally wise to take advantage of any employer match that’s available. Passing up on an employer match is like leaving free money on the table — money with the potential to grow tax-free and compound until you withdraw it.

Depending on your financial situation, you may eventually want to maximize your retirement account contributions. Below are the current contribution limits according to the IRS:

• 401(k), 403(b), and most 457 plans: For 2024, the maximum amount you can contribute to a 401(k) is $23,000. The limit applies to 403(b) and most 457 plans as well. Additionally, employees who are 50 years and over who participate in eligible employer-sponsored plans can contribute an extra $7,500 per year in the form of “catch-up” contributions if they desire to do so.

• IRAs: You can also opt to contribute up to $7,000 per year to an IRA. If you’re 50 or older, that amount increases to $8,000.

Read more: Why a CD should be part of your retirement savings plan

4. Automate your savings

Many banks will let you schedule automatic withdrawals straight from your checking account to your retirement account or savings account each month. No matter how much money you decide to save each month, automating your savings is a helpful tool to make sure you stay on track with your goals.

Bottom line

Saving money is an important habit to develop for your long-term financial success. If you haven’t been saving and you’re not sure how much money to set aside each month, it’s fine to start small and increase your efforts in the future.

Remember that it’s also OK to ask for help. You can connect with a reputable financial adviser for guidance on the ideal savings rate and investment options for your situation. But no matter what you decide to do, it’s always better to begin saving something sooner rather than later.