How Much Should You Save Every Month for a Secured Future?

2025-07-06

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If you are wondering, 'How much money should you save every month?' The answer depends on your financial goals. Remember that it is never too late to start. It is only too late if you don’t start at all.

We save money for multiple purposes. For example, we save to buy a car, a home, vacations, sponsor a child's higher education, or for retirement days. So, saving money to secure your family’s future is integral to your financial planning.

For some of us, it may become a challengesave every month, as our expenses exceed our earningsHowever, saving helps you manage your money more efficiently.

Key Takeaways

Saving each month helps you meet short-term needs and long-term life goals.
Even small amounts saved consistently can grow into a large corpus over time.
Automating your savings ensures discipline and builds long-term financial security.
An emergency fund protects your savings from sudden and unexpected expenses.
The right savings plan can offer guaranteed returns along with life insurance benefits.

How much you Need to Save Each Month?

The amount you need to save every month depends on your saving goals. We generally save with a goal in our mind. These are categorized into short, medium, and long-term. For each category, you must consider different timelines.

Less than a Year: For all the 1-year goals, you can rely on short-term savings. These goals may include an exotic vacation or paying for a small-ticket item, such as a new smartphone or gadget.
Less than a Decade:For all the goals that need a good amount of money and time, you have to consider investing money in medium-term investment plans. Goals such as buying expensive equipment or devices, getting a new car, or redoing the interiors of your home would require some time and a dedicated corpus.
Lifetime:The major lifetime goals are building a retirement corpus, buying your dream home, or financing your kids’ higher education.

Personal and financial goals tend to change with age, but it’s never too late or early to save money.

Your savings target will depend on your age, monthly income, expenses, liabilities, debts, life insurance premium payments, and other factors. Consider these factors to build your financial profile, and then set a target by keeping your monthly budget in mind.

Saving money for the future is considered one of the most important aspects of life. You must have a proper understanding of the different types of investment options available. Saving is a wealth collection method, while investment is an iSelect Smart360 Term Plan by Canara HSBC Life Insurance. Working on both will help you secure your future.

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Why Should You Save Money?

Saving money each month is beneficial in the long run asit provides a financial cushion to deal with any crisis. Apart from providing financial cushion, saving money has the following benefits:

Strengthens Financial Security:It is evident that saving provides financial security, and having money makes life easier. Any money saved or invested somewhere with returns helps to build a financially worry-free life. Most people save money for retirement as the regular stream of income stops.
Provides Room for Investment: There are many ways to save money for the future; one of the most common is to invest it. Investing money means making more money out of the money you. This kind of wealth creation comes with some risks. There are various investment options, and you should choose options as per your risk appetite.
Financial Freedom: Saving is a key to achieving financial freedom. One should not be financially dependent on someone else. It is essential to have funds for emergencies and unexpected expenses. Savings allow you to achieve your financial goals.
Provides for Emergencies: Emergencies are unpredictable, and having an emergency fund can save the day. An emergency fund is cash set aside in a savings account only for unexpected situations such as accidents, critical illness, etc. To keep emergency savings accessible and available, consider having an online savings account. If you are worried about managing the healthcare costs in case of a critical illness, you may consider buying a term insurance plan. Emergencies are unpredictable, and having an emergency fund can save the day. An emergency fund is cash set aside in a savings account specifically for unexpected situations, such as accidents or critical illnesses. To keep emergency savings accessible and available, consider having an online savings account. If you are concerned about managing healthcare costs in the event of a critical illness, you may consider purchasing a term insurance plan.
Helps Build a Comfortable Retirement: One should aim to save 15% of the salary for retirement, or start with a percentage that is under budget and manageable. Gradually increase it by 1% each year to reach the desired figure. The ideal way to save for retirement is by automating monthly transfers from the checking account directly to the savings account.

Saving money for the future is considered one of the most important aspects of life. You must have a proper understanding of the different types of investment options available. Saving is a wealth collection method, while investment is an iSelect Smart360 Term Plan method. Working on both will help you to secure your future.

How to Save Money Every Month?

Now that you understand the importance of saving money each month, you should also know a few ways to save. There is no “one size fits all” formula in personal finance.

Listed below are some of the popular ways to save:

50/30/20 Rule: It states that 50% of monthly income should be spent on essentials like food, rent, medical bills, education fees, etc. While 30% should be allocated for discretionary spending, and 20% should be set aside for a savings pot. However, it is not always easy for everyone to set aside 20% of their earnings for savings. In that case, save as much as possible.
Envelope System: It is an excellent way to keep track of your money. When setting up the monthly budget, you should allocate a specific amount to each category. Write down those categories on different envelopes. Put the assigned amount under each category inside the envelope. If you go overboard, you will find out that you have spent more than what you had planned to spend. At the end of the month, whatever amount is tucked away in all the envelopes, you can put it in your savings account.
Saving Plans: You can use savings and investment plans to put your money to work. Savings plans, such as the iSelect Guaranteed Future Plus Plan by Canara HSBC Life Insurance, offer life cover with guaranteed maturity benefits. These are beneficial for meeting long-term financial goals, as the corpus can help you attain milestones you have set in life, such as your child’s higher education or their marriage.

Wrapping Up

Saving is an integral part of financial planning. The earlier you start saving, the better it is. You will get more time to save and boost your wealth in the future. However, choose a savings plan that aligns with your life goals. Saving a small amount each month may not seem like much, but over time, it can accumulate into a substantial nest egg that provides financial security. By making savings a regular habit, you can build wealth gradually without feeling the pinch. Even if you start with just ₹1000 per month, that money will grow through the power of compound interest.

The key is to make savings automatic by setting up a recurring transfer from your checking account to a dedicated savings account. You can increase your monthly savings rate as your income grows over the years. With discipline and consistency, your small monthly savings will turn into a substantial sum that protects you from emergencies, funds your goals, and provides peace of mind in retirement. The journey to financial security begins with a single step - making that first monthly deposit.

Glossary:

Medium-term Investment Plans: Investments aimed at achieving financial goals within a period of one to ten years.
Discretionary Spending: Expenditure on non-essential items or services.
Automated Savings: Setting up automatic transfers from checking to savings accounts.
Recurring Transfer: An automated transfer of funds from one account to another on a regular basis.

FAQs Related to how much to save from salary

Your savings should be at least 20% of your income. The rest, 80%, should go toward necessary living expenses and other wants.

By setting aside a significant portion of your salary, you can accumulate a sizeable nest egg that will give you freedom and financial stability. Remembering your long-term objectives is essential to applying the 70 per cent savings rule properly.

The 75/25 saving technique indicates that you set aside 25% of your income for savings or investments and utilise the other 75% for regular expenses and requirements. In this manner, you're saving money for the future while covering your present costs.

This rule's key component is that at least 20% of your income should always be allocated towards your long-term financial objectives. Investing, saving, or debt repayment should receive the first 20% of your income automatically. Your emergency fund should be sufficient to cover three to six months' worth of costs. Rent, entertainment, and other necessities and wants account for the remaining 80% of income.

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.