Budget Calculator · Practical guide
How Much Should I Save Each Month?
The standard guideline is 20% of take-home pay — but any positive savings rate beats zero.
At a glance
The 20% Guideline
The most common rule of thumb is to save 20% of your after-tax income. On a $4,000 monthly take-home, that is $800 per month; on $6,000, it is $1,200. If 20% is not possible today, start lower and step up — a 10% rate on $4,000 is still $400 a month and $4,800 a year, and it builds the habit you will need when income grows.
Interactive tool
Budget Calculator
Enter your own values, then compare the result with the examples below.
Budget Summary
Spending Breakdown
Savings Targets by Income and Rate
| Monthly Take-Home | 10% Rate | 15% Rate | 20% Rate |
|---|---|---|---|
| $2,500 | $250 | $375 | $500 |
| $4,000 | $400 | $600 | $800 |
| $6,000 | $600 | $900 | $1,200 |
| $8,000 | $800 | $1,200 | $1,600 |
Where the Money Goes First
Order matters more than amount. Financial planners typically suggest this sequence: first, a starter emergency fund of $1,000; second, enough to your 401(k) to capture the full employer match, which is an instant 50–100% return; third, pay down high-interest debt above roughly 7–8%; fourth, build the emergency fund to three to six months of expenses; only then stretch toward longer-term investing goals.
Pay Yourself First
The most reliable way to hit a savings target is to treat savings as a bill: enter it as a fixed line in the calculator alongside rent and utilities, and automate the transfer on payday. What remains is safe to spend. The calculator's savings rate readout — savings divided by income — tells you at a glance whether you are on pace for your target.
Frequently Asked Questions
Does my 401(k) contribution count as savings?
Yes. Retirement contributions, emergency fund deposits, and extra debt principal all count toward your savings rate because they increase your net worth.
Should I save or pay off debt first?
Do both in sequence: grab any employer 401(k) match first, then attack high-interest debt, then build savings. Low-interest debt like a mortgage can be paid on schedule while you save.
Is saving 10% enough?
Ten percent is a reasonable starting point but typically supports retirement only if maintained from your early twenties. Most guidelines land on 15–20% when starting later or targeting flexibility.
How much should my emergency fund be?
Three to six months of essential expenses is the standard target. Single-income households and freelancers often aim for the higher end because their income is less predictable.