Skip to main content.
Determining How Much Money to Save Each Month

Determining How Much Money to Save Each Month

Save for the future month-by-month

Determining How Much Money to Save Each Month

Saving for the future is often overwhelmed by today’s bills and financial pressures. Yet, despite the challenges of setting money aside, it’s so important for your financial well-being to try and save a target amount each month. Whether you’re trying to establish an emergency fund or save for retirement, by implementing a goal and setting and sticking to a budget, your bank account will be able to grow over time giving you a sense of financial prosperity and security.

Emergency goal

According to writer Nancy Mann Jackson, although the amount to be saved for a solid emergency fund differs for everyone and is determined by your specific expenses and income, “a general rule of thumb is to save enough to cover four to seven months’ worth of expenses.”

After you’ve done the math to estimate your emergency fund amount, determined how much to put aside each paycheck that fits a sensible budget and regard it as a monthly bill you have to pay, Mann Jackson advises keeping the fund’s access at an arm’s length.

“Consider keeping emergency funds in a combination of locations, including an online savings account, in savings bonds and as cash in a lockbox at home,” reports Mann Jackson. Consider a purchase of a short-term certificates of deposit with three-or six-month terms on a regular basis.”

Retirement dreams

Saving for retirement month-by-month is not an exact science. There are just too many unclear factors to consider such as how long your career will be; how the market and your investments will do; and what events in your life will cause financial strain for a 100 percent accurate budget, according to writer Tim Parker.

 “What is possible, however, is to operate under some rules that make assumptions. For instance, you could assume that you’ll have a steady income until age 65,” reports Parker.

To start the financial savings ball rolling, Parker says you need to understand replacement rate, which is “the percentage of your salary that you’ll receive in retirement benefits after you stop working. If you made $100,000 a year when you were employed and receive $38,000 a year in retirement payments, your replacement rate is 38 percent. (Needless to say, this figure is much too low for most people.)”
The experts at advise that a person should work toward the goal of replacing at least “70 to 90 percent of their pre-retirement income through savings and Social Security.”

Once you decipher your replacement rate percentage, estimate what you think you’ll spend in your retirement and factor in the age you start saving as well as the age you want to stop working, you will be one step closer to determining a clearer savings goal each month.

Saving while still trying to pay for living expenses can be a financial challenge, but the best way to prepare for the future is to work toward your savings goal and start saving as soon as possible.

Published by North Shore Bank. Includes copyrighted material of IMakeNews, Inc. and its suppliers.

More blog posts

Still have questions?  Email Us  |  Visit your neighborhood branch.  |  877.672.2265
Online Banking Login
  Locate a North Shore Bank branch in your neighborhood. Locations
& ATMs
Contact North Shore Bank. Contact
  Interest Rates Rates Open your account or apply for a loan. Open
  Ask Us A Question FAQs Learn more about our Video Teller system. 70 Hours,
7 Days a
Top Frequently Asked Questions
Mobile Banking - Safe & Secure
Learn more about North Shore Bank's products and services.
Bank conveniently with your iPad.
North Shore Bank Prepaid Cards
Contact a Mortgage Loan Professional to get you started on the path to home-ownership.

Routing Number: 275071356    Customer Service: 877.672.2265
Routing Number: 275071356 | Customer Service: 877.672.2265 | Member FDIC | Copyright North Shore Bank