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How much money should I save?

In an ideal world you’d try to save as much as you can afford each month. But we know that starting to save money can be tough, especially if you're saving for the first time. 

There's no specific amount of money that everyone should save. How much you can save depends on your income and how much you need to spend, so everyone’s savings will be different. 

You might find a saving technique like the 50-30-20 method useful, to structure your money  and make sure you’re saving enough each month. 

And once you’ve got some savings, it can be a good idea to put your money in a savings account so it can earn some interest and you can make the most of it!

How much money does the average person have in savings?

It’s easy to think you should have a certain amount of money saved by the time you’re 25, or 35, or 45 (and so on…). And if you don’t then you’re a failure.  But actually, you should base the amount of money you save on what you can afford. 

It depends on factors like your income, your living expenses, any debt you might have to pay off (like a credit card), and what your financial goals are.

But if you’re looking for the general trend around savings, the Office for National Statistics released a survey last year that showed more than half of 22 to 29 year olds have no savings at all.

What is the 50-30-20 method?

The 50-20-30 savings method a technique for budgeting and saving. The idea is that you split your earnings so 50% goes on things you need, 30% on things you want, and 20% on repaying debts and saving for the future. 

It's useful if you're thinking about how much money you should start saving and how to start forming good savings habits.

50% on your needs

To start, work out your monthly income after tax. This is the net pay figure on your payslip.

Then, identify your needs. These are expenses you have to pay as necessities. They're things like rent, mortgage payments, bills, council tax, student loan, travel costs, food, phone contracts etc! Start with the absolute basics and go from there. 

Once you've worked out what your needs are, work out what percentage of your monthly income you spend on them. 

In an ideal world, you’d spend no more than 50% of your monthly income on these essentials. But for many 

If you’re spending more than half of your income on needs, try and revisit your list to see where you could cut costs. If you find it’s just not possible (and you’re definitely not alone!), you can adjust the percentage you’re spending on wants or savings.  

30% on your wants

Your wants are basically any purchase that isn't completely essential. This can be things like going out for a nice meal for a special occasion, going to the cinema to relax with friends, or paying for a gym membership to keep fit.

Your wants should take up no more than 30% of your monthly earnings. Again, it’s useful to estimate how much your wants usually cost each month. Then you can find ways to reduce your spending if you need to. 

20% in your savings

The remaining 20% of your monthly income can go towards savings! Some people put this 20% towards an emergency fund, paying off credit card debt or a specific savings goal like a down payment for a house deposit.

If this sounds like a good savings plan for you, find out more about the 50-30-20 method here. And remember, you can adjust the percentages you spend on needs, wants and savings so they suit you.

What’s an emergency fund?

You could put the money you’ve saved towards an emergency fund. 

An emergency fund can mean a few different things. It can be a savings account that has between three and six months’ worth of outgoings and expenses, or it can be a couple of months’ of your salary. 

But everyone's emergency fund will look different! Use the 50-20-30 method above to see how much money you have left after factoring in your crucial expenses and absolute necessities. The money you've set aside can go into your emergency fund.

Work towards a savings goal

The 50-30-20 method can be useful as a guideline. But you might prefer to aim towards a specific savings goal. A savings goal can motivate you to stick to your savings plan and avoid the temptation to dip into your savings.

Savings goals can be short and long term. As long as it’s helping you towards financial security, then it’s a savings goal!

Any money you’ve saved can go into a savings account💰

A savings account is a place to keep your money and earn interest on it. 

There are different kinds of savings accounts you can open, including regular savings accounts, Individual Savings Accounts, easy-access savings accounts and instant access savings accounts. Find out which savings accounts you can open with Monzo. 

Once you have at least £10 in savings, you could start earning interest by opening a Savings Pot through Monzo. You can earn up to 1.55% (AER/Gross, variable, 12 months Fixed Term) to help your savings grow!

The money you put in one of our Savings Pots is protected by the FSCS (Financial Services Compensation Scheme) for amounts up to £85,000.

The FSCS apply this limit to each person and to the total amount of any money you have with the provider, whether held through Monzo or not. This means if you have separate accounts with our savings providers outside of the Monzo app, then the deposits held in those accounts will also count towards the limit of £85,000


If you’re looking to open a savings account to make the most out of your money, download Monzo. Find out more about saving with Monzo here!💰