How much should I save each month? Work out your own number

The 50/30/20 rule says 20% of take-home pay should go to savings and debt repayment. It is a fair target for someone with stable income and moderate rent, but it can be wildly wrong in both directions.

Someone renting in London on an entry-level salary may struggle to save 5% without cutting essentials. Someone living at home with no debts could comfortably save 40% and reach a house deposit years sooner. A fixed percentage also says nothing about timing: £200 a month is plenty if your only goal is a holiday next summer, and nowhere near enough if your car insurance, MOT and Christmas all land in the same quarter.

Working from your goals upwards gives you a number with a reason behind it, which makes it much easier to stick to. You can still compare the result with the 50/30/20 rule at the end.

Before setting any target, work out your real monthly surplus. Take your average take-home pay over the last three months, then subtract everything that leaves your account: rent or mortgage, council tax, energy, phone, broadband, insurance, debt repayments, food, transport and everyday spending.

Use actual statements rather than estimates. Most people underestimate small card payments and subscriptions by a noticeable amount. The budget planner lets you list every category and see the gap in one place.

Whatever is left is your ceiling. Your savings target can be lower than this figure, but if it is higher you will need to cut spending, raise income or stretch your deadlines.

An emergency fund comes first because it stops a broken boiler or a gap between jobs turning into credit card debt. The usual target is three to six months of essential spending: housing, bills, food, transport and minimum debt payments, not your full lifestyle spending.

Choose the upper end if you are self-employed, a single earner, have dependants or work in an insecure industry. Subtract what you already have set aside, then decide how many months you want to take to close the gap. Twelve months is a sensible default; six if you have nothing at all and feel exposed.

Our emergency fund guide goes into how big yours should be, and the emergency fund calculator does the sum for you.

Irregular but predictable costs are where most monthly budgets fall apart. A sinking fund means putting aside one-twelfth of each yearly cost every month, so the money is waiting when the bill arrives.

Go through the last 12 months of statements and list every cost that did not happen monthly. Typical ones include car insurance, MOT and servicing, home insurance, TV licence, Christmas, birthdays, school uniforms, glasses or dental work, and annual software or membership renewals. Add them up and divide by 12.

This number is not really optional saving; it is spending you have smoothed out. That is why it belongs in your monthly target. See sinking funds explained for how to organise the pots.

Now list the things you actually want to save for, each with a target amount and a date. A holiday, a car replacement, a wedding, a house deposit. For each, divide the amount still needed by the months until the deadline.

Be honest about dates. A £15,000 deposit in two years needs £625 a month; in four years it needs £313. If the total across all goals is more than your surplus, you will need to rank them and push the lower-priority dates back, rather than trying to fund everything thinly.

The savings goal calculator works out the monthly figure for each goal, including interest.

Retirement saving usually happens before your pay reaches your account, so check it rather than adding it to your monthly total. If you are an employee aged 22 to State Pension age earning over £10,000 a year, your employer must automatically enrol you in a workplace pension.

The legal minimum is 8% of qualifying earnings (pay between £6,240 and £50,270 in 2026/27), of which your employer must pay at least 3%. Your 5% includes tax relief. If your employer offers to match higher contributions, increasing yours is often the best-value saving you can do, because the extra employer money is an immediate return.

If you are self-employed there is no automatic pension, so add a monthly pension amount to this step. Our guide to auto-enrolment explains the rules, and the pension calculator shows whether you are on track.

Here is the method applied to someone with take-home pay of £2,200 a month, essential spending of £1,300 a month and £900 already saved.

£490 is about 22% of take-home pay, close to the 20% rule of thumb, but now every pound has a job. After a year the emergency fund is complete, and that £250 can move to a longer-term goal such as a deposit or investing.

This is common, and it does not mean the plan has failed. You have three levers: lower the targets, extend the deadlines, or find more money. Most people use a mix.

Keep the emergency fund and sinking funds as the priority, since skipping them leads to borrowing. Then stretch goal deadlines until the total fits. Review it each time your pay changes; putting half of any pay rise towards savings is a painless way to close the gap.

Small daily amounts help too. The SYM app tells you how much to put aside each day for a challenge and logs it with one tap, which suits people who find a single large monthly transfer hard to face.