How Much to Save Each Month

"How much should I be saving?" is usually easier to answer backward than forward. Instead of guessing at a monthly number and hoping it adds up to something meaningful, start from what you actually want the money for and work back to a required monthly contribution.

Four numbers you need

Working backward only takes four inputs: the goal amount, what you've already saved toward it, how long you have, and what return you expect along the way. Change any one of them and the required monthly number moves — which is exactly why this is worth calculating rather than guessing. A goal that looks impossible on a 5-year timeline can look very achievable over 15, and a modest return assumption can require a surprisingly larger monthly contribution than an optimistic one.

What to do when the number feels too high

If the required monthly contribution is more than you can realistically commit to, you have exactly three levers to pull, and it's usually some combination of all three rather than maxing out one: push the timeline out, lower the target amount, or accept a plan that gets you most of the way there and adjust as your income changes. There's rarely a fourth lever hiding somewhere — chasing a much higher return to close the gap usually means taking on a lot more risk, which trades one problem for another.

Automate it, then forget about it

Once you have a target monthly number, the single most effective thing you can do is automate a transfer for that amount right after payday, rather than saving "whatever's left over" at the end of the month. Whatever's left over has a way of being smaller than planned; money that moves automatically before you see it usually doesn't.