Most of us know we should be saving more money, but for a lot of us, that's easier said than done.

Life gets expensive, and it can be tough to put money away for a rainy day when you're already struggling to make ends meet.

But the truth is, if you don't start saving now, you'll never reach your financial goals.

Whether you're looking to buy a house, save for retirement, or just have some extra cash on hand in case of an emergency, you need to be proactive about your savings.

Why is prioritizing savings so important?

There are a number of reasons why it's so important to start saving as early as possible.

For one, you'll benefit from compound interest.

This is when the interest you earn on your savings starts to earn its own interest, and it can really add up over time.

The sooner you start saving, the more time your money has to grow.

Another reason to focus on savings is for peace of mind.

If you know you have some money set aside, you'll be less stressed in general and better prepared to handle unexpected expenses.

Finally, having a savings goal will give you clarity and confidence.

When you know how much you need to save and have a plan for doing so, it's much easier to stay on track.

So how much should you save each month?

Now that we've talked about the importance of saving money, let's talk about how much you should be putting away each month.

This will depend on several factors, including your financial circumstances and the short-term, long-term, and super long-term goals you have.

As they say, personal finance is personal. Only you can determine your goals and what it will take to achieve them.

That said, here are a few things to consider when setting your monthly savings goals:

What's your current financial situation?

Do you have any debt? If so, how much?

Do you have a steady income?

Are your expenses low or high?

All of these factors will impact how much you can realistically save each month.

There are ways to adjust those numbers, but being aware of your current situation will help you craft a plan moving forward.

Short-term savings goals (under a year out)

Your short-term savings goals will likely be the most immediate and pressing, so start with those.

How much you save every month for these short-term goals will depend on how much debt you have, your monthly income, and your monthly expenses.

Some common short-term savings goals are:

• building your emergency fund

• filling up your sinking funds

• travel and vacation

• electronics upgrades

• breaking the paycheck-to-paycheck cycle

If you're trying to break the paycheck-to-paycheck cycle, you'll want to save at least a month's worth of living expenses in your emergency fund. This will give you a cushion in case of an unexpected emergency.

If you have high-interest debt, consider putting as much as you can toward paying it off. Not only will reducing your debt make it easier to save, but you'll also save extra money on interest in the long run.

Long-term goals (1-10 years out)

Your long-term goals will require a bit more planning than your short-term ones, but they'll still be within reach if you start saving now.

Some common long-term savings goals include:

• a down payment on a house

• a new car

• paying your student loan debt

• paying off credit card debt

• 3-6 months of living expenses in your emergency fund

For these goals, you'll want to start by looking at your current financial picture and setting a realistic savings goal.

From there, you can use a savings calculator to determine how much you need to save every month to reach your goal within the timeline you're hoping for.

Super long-term goals (10+ years out)

Extreme long-term goals are the hardest to plan for.

Not only is it hard to estimate how much you'll need a decade or more from now, but your financial situation is also likely to change quite a bit over that period.

That said, it's still important to start thinking about and planning for these goals as early as possible.

Some common super long-term savings goals include:

• retirement

• saving for your children's education

• paying off your mortgage

• an additional emergency fund for future medical expenses

How much you need will depend on several factors, including your lifestyle, health, and expected lifespan.

For these far future goals, you'll want to start building your savings as early as possible so you can take full advantage of compound interest.

The sooner you start, the more time your money has to grow.

What percentage of my income should I save each month?

Unfortunately, there's no right answer to this question, since it will depend on your finances.

A general rule of thumb is to follow the 50/30/20 budget rule and try to save 20% of your monthly income each month.

This will help you make headway on your short-term and long-term goals without putting too much strain on your monthly budget.

Keep in mind, that 20% is of your take-home pay. Ideally, you'll also be maxing out your 401k or other pre-tax retirement contributions to help cover your super long-term goals.

What if I can't save that much?

Many of us think we simply can't afford to save that much money. But a lot of the resistance is more about your mindset than your paycheck.

Here are some things to keep in mind:

Adopt a pay yourself first approach

A lot of us have the habit of paying for our bills and everyday spending and then trying to save whatever is left.

Unfortunately, with this approach, we often don't have much left to save.

Instead, start setting aside your savings first and then spend what's left. This simple shift can make a big difference in how much you're able to save every month.

It's ok to start small and increase your savings over time

There's no rule saying you have to save 20%, and especially not one that says you have to start at that rate.

If that feels like too much, start smaller and gradually increase your savings.

Most experts think 20% is a good savings rate, but you need to do the math to see what amount of savings will be most effective to reach your goals.

Prioritize your spending

If you're genuinely struggling to save, it might be time to take a look at your lifestyle and see where you can cut back.

This could mean anything from cooking at home more often to downsizing your car.

Start tracking your spending so you can understand where your money is going.

Then decide what expenses align with your values and priorities and which you can cut.

Increase your income

One of the best ways to increase your savings is to increase your income.

While cutting costs is effective, it's relatively limited. But there are no limits to what you can potentially earn.

This could mean getting a better-paying job or earning extra income through side hustles.

Creating new income streams can be a great way to reach your financial goals faster.

How to find more money to save

Saving money is essential, but it's not always easy. The most important thing is to start somewhere and be consistent with your savings goals.

Here are some ways you can try to find more to save:

Make a budget

One of the best ways to get a handle on your finances is to create a budget. This will help you understand where your money is going each month and identify areas where you can cut back.

Be more frugal

You don't need to make drastic changes to your lifestyle to save money. There are lots of small ways you can be more frugal and reduce your current spending.

• Eat at home

• Look for discounts

• Use coupons

• Buy discounted gift cards

Set spending limits

Saving money doesn't have to mean restricting all your spending, but you will save more if you can learn to be intentional with your spending.

Impulsive spending can sabotage all your savings efforts.

Setting certain limits, like imposing a 24-hour wait limit on all spending over a certain amount, can help you avoid impulsive buys.

Pay off your debt

Paying off your debt should be a top priority if you're trying to save.

Debt has the double whammy effect of not just being an expense but an increasing one because of the interest charges.

By paying off your debt you can prevent additional charges and free up your payment to put toward your savings goals.

Automate your savings

If you're struggling to adopt the pay yourself first mindset, try automating your savings.

Set up rules with your bank to automatically transfer money from your checking account into your savings account every payday.

You won't miss it if you never see it.

Try a savings challenge

Savings challenges are another fantastic way to save money when you don't think you have enough.

By gamifying your savings, you'll not only get more intentional about saving, but you'll have more fun along the way!

Combine challenges with automation and you'll be saving faster than ever.

Where to put your savings each month

Once you've decided how much money to save each month, it's time to think about where to put that money.

There are lots of options available, but the best one for you will depend on your specific goals.

Here are some of the most popular options:

High-yield savings account

If you're looking for a safe place to park your money with easy access, a high-yield savings account is a good option. Just beware of the fees some banks charge.

Certificate of deposit

A certificate of deposit offers higher interest rates than a savings account and typically has a set maturity date. This means you won't be able to access your money until the CD matures, but it can be a good option if you're trying to save for a specific goal.

Money market account

A money market account is similar to a savings account but typically has higher interest rates and may have some restrictions on withdrawals.

Individual retirement account

An IRA is a retirement account that offers tax advantages. There are two main types of IRAs: traditional and Roth.

Which one is right for you will depend on your specific financial situation. Check with your accountant or financial planner for legal or tax advice.

Employer-sponsored retirement plan

Many employers offer retirement savings plans, such as a 401(k). These plans often have tax advantages and many employers offer matching contributions, which can be a great way to boost your savings.

If you're offered an employer match, make sure you're contributing at least up to that matching level. The employer match is literally free money, so don't miss out on it.

Again, check with your accountant for any tax advice regarding your retirement savings.

What are average savings by age group?

Once you've decided how much to save each month, it's helpful to compare your savings rate to others in your age group.

According to 2019 data from the Federal Reserve, here are the average savings balances across the different age ranges:

• Under 35: $11,250

• 35-44: $27,910

• 45-54: $48,200

• 55-64: $57,670

• 65-74: $60,410

• 75 and older: $55,320

Keep in mind, these savings represent funds in traditional "transaction" accounts like checking, savings, and MMAs. Retirement accounts are NOT included in these numbers.

So how much should you have saved at different stages of your life?

While it's nice to know where we stand in relation to our peers, it's even better to think ahead to certain life events and plan our savings accordingly.

While there's no magic number we can all look to as our savings goal, there are some things you can keep in mind as you plan them.

How much should I save in my 20s?

Your twenties are when you should establish strong savings habits.

Building your savings while you build your career will set a solid foundation for your financial future.

Using the 50/30/20 rule, you may aim to save $500 every month (or as close to 20 percent as possible).

Also, be tactical with any windfalls or bonuses and save the majority instead of allowing lifestyle creep to sneak in and cause you to reduce your savings while you increase your cost of living.

How much should I save in my 30s?

Your thirties are likely a time of growth and massive lifestyle changes.

While your career may be flourishing, and your income with it, this may also be the time you decide to start a family or buy a house.

These increased expenses may tempt you to save less, but try your best to maintain or even increase your savings rate.

Saving consistently will help you continue to make progress toward your long-term savings goals and keep the momentum of compounding working in your favor.

How much should I save in my 40s?

Your forties may bring the desire for change as well as new expenses you may not have planned for.

Goals like early retirement and paying for your child's college tuition are likely coming into focus.

Again, consistency in savings is key to ensuring you stay on track. The more you can save now, the better set up you'll be for the next stage of your life.

How much should I save in my 50s?

In your fifties retirement is edging closer, making your savings more important than ever.

As you get older, your focus may be shifting to encompass current and future healthcare needs as well as shifting family dynamics.

Maintaining a 20% savings rate will help you continue to grow your nest egg and fund your future financial goals.

Can I save too much?

You may be wondering if there is such a thing as saving too much money.

While there's no definitive answer, it is important to make sure you're not sacrificing your quality of life in favor of saving.

Aim to save an emergency fund of 3-6 months of living expenses. This will give you some security and peace of mind in the event of an unexpected job loss or medical emergency.

Beyond that, it's up to you how much extra you want to save.

Definitely fill up sinking funds for common unpredictable expenses like car repairs or home maintenance.

Also, consider investing in stocks or index funds if it aligns with your saving goals and priorities.

Just remember to strike a balance between your savings and expenses. Leave yourself enough money to enjoy your life as you live it.

Tools to help you save more each month

Determining how much you can, should, and want to save each month might be overwhelming, but it doesn't have to be.

Use an online savings calculator to help you figure out your numbers so you can create your own financial plan.

Once you've determined how much you need to save each month, it's time to start working towards your savings goal.

Here are a few tools that can help:

You Need a Budget (YNAB)

YNAB is a powerful budgeting software that will help you not just take control of your spending, but also be more intentional with your savings.

Qapital

Make automating your savings super simple with the Qapital app.

From rounding up your purchases to weekly savings challenges, Qapital can help you save more money with less effort.

M1 Finance

If you're looking to invest in the stock market, M1 Finance makes it easy to set up investment accounts.

You can build your own portfolio or choose from pre-made options to help you get started.

Final Thoughts

No matter what your age, it's never too late to start building your savings for your future.

The amount you save each month will depend on your specific goals and how long you have to reach them.

However, maintaining a consistent savings rate is key to making progress toward your long-term financial goals.