# How much should you be saving?

When it comes to saving money, the more you save, the better.

However, with bills to pay, food, car payments, etc. it is necessary to calculate your monthly expenses first and use it to determine how much you can save.

Once you’ve calculated your monthly expenses take a minute to go through each expense and determine if it is really necessary.

For example, do you really need cable in every room of the house? Is your electricity bill usually high because you leave the TV on at night? Is your gym membership worth it?

Have a look through what you spend your money on and see if you can make any cuts – that don’t significantly undermine the lifestyle you want to live.

A general rule of thumb is to save at least 10% to 15% of your monthly income.

But you can potentially save a lot more if you make adjustments to your lifestyle. If you are able to save 30% of your monthly income you can potentially save a lot more.

### Saving 30% vs 10%

Saving 30%: Let’s assume you earn 50,000 USD per annum and have a savings base of \$1 and you deposit 30% of your monthly income (\$1249) into a savings account every month for 15 years.

Starting from a savings base of \$1.00 with annually deposits of \$1,249.00 for 15 years at an interest rate of 2.00%, your savings growth could be as follows:

 Year: Balance: 1 \$15,263.80 2 \$30,831.86 3 \$46,711.27 4 \$62,908.28 5 \$79,429.22 6 \$96,280.59 7 \$113,468.98 8 \$131,001.14 9 \$148,883.94 10 \$167,124.40 11 \$185,729.67 12 \$204,707.04 13 \$224,063.96 14 \$243,808.02 15 \$263,946.96

Final savings balance: \$263,946.96

Saving 10%: Let’s assume you earn 50,000 USD per annum and have a savings base of \$1 and you deposit 10% of your monthly income (\$416) into a savings account every month for 15 years.

Starting from a savings base of \$1.00 withannually deposits ofn\$416.00 for >15 years at an interest rate of 2.00%, your savings growth could be as follows:

 Year: Balance: 1 \$5,084.54 2 \$10,269.75 3 \$15,558.67 4 \$20,953.36 5 \$26,455.95 6 \$32,068.59 7 \$37,793.48 8 \$43,632.87 9 \$49,589.04 10 \$55,664.34 11 \$61,861.15 12 \$68,181.89 13 \$74,629.05 14 \$81,205.15 15 \$87,912.78

Final savings balance: \$87,912.78

Per the information above one can see that saving 30% of your monthly income is a much more lucrative option and should be considered if possible.

Use the calculator below to determine your savings:

### Bankrate’s Simple Savings Calculator

Simple Savings Calculator