How much of your paycheck should you save?
Most budgeting frameworks suggest setting aside a portion of each paycheck for savings. One commonly cited benchmark is 20%, but the right amount can vary depending on income, expenses, and financial priorities.
Under the 50/30/20 budgeting rule, it’s generally recommended that 20% of your paycheck goes into savings.
If you’re not able to save 20% today, you may want to start small and remember to increase that percentage as you earn more money or trim expenses.
Building your savings is still possible with debt, it just might take a bit of balancing.
The general rule of thumb for saving your paycheck
The 20% savings guideline
The 50/30/20 rule, a popular budgeting style, includes a guideline for directing 20% of your paycheck into a savings account.
Why this is a guideline, not a requirement
If you’re not able to dedicate a full 20% to savings yet, don’t worry — it’s more of an aspirational number, not a mandatory rule. Plenty of people don’t put away a full 20% of their income due to other financial obligations like student loans, debt, or a lower income level that doesn’t allow for much discretionary spending.
Common savings benchmarks (by percentage)
Saving 5% of your paycheck
You could work toward building your savings by stashing away 5% of your pay instead of aiming for a full 20%. Starting small can get you into the habit of saving, and even small contributions can help build momentum over time.
Saving 10% of your paycheck
Aiming to save 10% of your pay can be a strong, mid-range goal. It may feel more within reach if you make some modest budgeting changes, like redirecting dollars for dining out into savings. Saving 10% can help build up your emergency savings, and it may also allow for modest retirement account contributions.
Saving 15–20% of your paycheck
Saving around 15-20% of your pay may help work toward long-term financial stability through actions like increasing your retirement contributions. It also may allow you to set money aside for any future goals you have. It can also provide a bit more flexibility so you can cover unexpected expenses.
Saving more than 20%
Some people choose to save more than 20%, especially if they’re earning a high income or have low living expenses. Saving more than 20% of your pay may allow you to reach long-term financial goals, like financial independence or early retirement, sooner.
How much you should save based on your income
If you’re a low-income earner
It can be helpful to keep things realistic by focusing on building consistent saving habits rather than trying to be “perfect” at saving. Many people choose to focus on building an emergency fund before increasing other types of savings. Even stashing away small amounts — say, $25-$50 per paycheck — matters.
If you’re a middle-income earner
Some people choose to balance savings contributions with debt repayment, depending on their financial priorities. For example, when you get a raise, you could consider increasing your savings gradually as your income goes up. It can be a good idea to check with your employer about automatically sending part of your paycheck into savings to avoid lifestyle creep.
If you’re a high-income earner
With high income often comes more ability to save money, but also potentially more responsibility. There can be a higher risk of lifestyle inflation, but a higher income also typically allows you to save aggressively to build long-term wealth.
How debt affects how much you should save
High-interest debt (credit cards, payday loans)
Many financial strategies focus on paying down high-interest debt before increasing savings, since interest costs can compound quickly.
Then, you could use leftover money to start a small emergency fund.
Low-interest debt (student loans, mortgages)
You could create a balance by directing money toward paying down this debt and building your savings.
This type of debt may allow for some extra room to save and invest while paying off loans.
Finding the right balance
Making room in your budget for both saving money and paying down your debts can be helpful.
How to increase your savings rate over time
Start small and scale up
It can help to pick something that feels manageable at first, then slowly increase that number by 1-2% every few months.
Save your raises and bonuses
It’s often easy to spend more when you make more. If you get a raise or bonus, it may make saving easier if you redirect that extra income directly into your savings account so you won’t be tempted to spend it.
Reduce high-impact expenses
You could also evaluate whether you can trim some of your expenses to free up some additional funds. If you’re renting, you may want to check into lower-cost apartments. I If you have a mortgage, you may be able to save money with a refinance, depending on a variety of factors and your bank’s policies. Similarly, you could cut back on other costs, such as streaming services or transportation expenses.
Common mistakes people make when saving
Waiting until you “have extra money”
As income rises, it’s often human nature to adjust your lifestyle to spend more, which can make it feel like there’s never money left over to put into savings. Creating a budget and sticking to it may help you “find” extra money which you can funnel into savings.
Trying to save too much too fast
Depriving yourself of the basics or even a little fun now and then just to hit the 20% savings goal is often a quick way to lose motivation or give up altogether. You may want to start with something that feels more reasonable and work your way up from there.
Not separating savings by purpose
Lumping all of your savings for retirement, vacation, or emergency expenses together could muddy the waters by not providing a clear picture of how much money you have for each purpose. You may want to separate your accounts accordingly, so you know exactly how much savings you have for each goal.
Bottom line
Saving 20% of your paycheck is a common benchmark used in many budgeting frameworks. For many people, it’s not necessarily something they can do today. You can start building your savings habits by setting aside smaller amounts from your paycheck and gradually increasing as you earn more money. Creating a budget can be an excellent way to start building the habit of saving to create a financial cushion for future goals and unforeseen emergencies.
If you’re looking for a high-yield savings account, Raisin’s Marketplace can help. It lets you compare multiple options to find the best account for your savings goals.
Frequently asked questions
Saving 5% of your paycheck can be a starting point, especially if you’re building the habit of saving. As you continue to earn more money, you may want to revisit that number and see if you can bump it up even more.
Some budgeting approaches prioritize covering fixed expenses first, then allocating remaining funds to savings.
Some people review discretionary spending categories, such as dining or subscriptions, when looking for ways to increase savings. Creating a budget can help you see where you’re spending money and more easily identify any leftover money to put toward savings.
It can be helpful to include retirement savings in your total savings percentage. If you can add extra money beyond your 20% though, it can be smart to go ahead and do it.
The above article is intended to provide generalized financial information designed to educate a broad segment of the public; it does not give personalized tax, investment, legal, or other business and professional advice. Before taking any action, you should always seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional matters that affect you and/or your business.
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