How much should I have in savings?

Many people wonder whether they’re saving “enough.” You might be worried that your friends or colleagues are miles ahead with their savings, emergency fund or retirement pot. The truth is, everyone’s financial journey looks different, and the amount you’ve saved isn’t as important as whether you’re using your money the right way. 

Instead of stressing about hitting an arbitrary number, a better approach is to look at how you manage the income you already have. That’s where budgeting frameworks and smart saving habits come in. Thinking ahead, building an emergency fund and staying on track for long-term goals (like investing or buying a home) is much easier when you understand how to divide your money effectively. 

How much of your salary should you save? 

A big part of smart money management is knowing what proportion of your income goes where. When you understand how much of your salary is spent on essentials, discretionary spending and savings, it becomes much easier to: 

• Plan for future financial goals 
• Identify wasteful spending 
• Decide whether you need additional income streams 
• Understand whether a new role or higher salary is necessary. 

This structure gives clarity and confidence. And one of the most popular frameworks for budgeting is the 50:30:20 rule, which is simple, clear and easy to apply. 

The 50:30:20 rule 

The 50:30:20 rule is an easy and widely recommended method used by financial advisors to help people budget without overthinking every euro. 

Here’s how it works: 

50% — Needs 

 These are your essential expenses, such as: 

• Rent or mortgage 
• Utilities 
• Groceries 
• Transport 
• Insurance 
• Minimum debt repayments. 

Essentially, anything you must pay to live and work. 

30% — Wants 

These are the non-essential costs that improve quality of life, such as: 

• Eating out 
• Streaming subscriptions 
• Holidays 
• Personal shopping 
• Hobbies. 

These should be enjoyable, but they should never replace savings or repayments. 

20% — Savings / Investing / Debt reduction 

This is where long-term financial growth happens. It includes: 

• Emergency fund contributions 
• Savings accounts 
• Investments 
• Extra mortgage or loan repayments 
• Pension top-ups. 

Think of this final 20% as future-proofing your finances. This money works for the future you want, whether you’re planning to buy property, start investing or build a cushion for unexpected expenses. 

How to apply the rule to your life 

1. Calculate your take-home pay.
   Use net income rather than gross salary for accuracy. 
2. List your monthly expenses.
   Categorise them into needs, wants and savings. 
3. Check your percentages.
   See whether they align with 50:30:20. You might be surprised to see where most of your budget is going. 
4. Adjust your spending.
   Small changes can get you closer to a sustainable budget structure. 

If you need help organising your expenses, using a budget planner is a great way to see everything clearly in one place. 

 Is the 50:30:20 rule realistic? 

For many people, yes, but there are limitations. 

The 50:30:20 framework is a guide, not a strict rule. Here are situations where it might need adjusting: 

1. High cost of living areas
   Rent or mortgages might exceed the 50% category. 
2. Saving for a large purchase
   If you’re saving for a house deposit, for example, you may need to place more than 20% into savings consistently. 
3. Variable income
   Freelancers, contractors or commission-based workers may find percentages fluctuate monthly. 

Here’s how to adapt the rule effectively: 

• Lower your “wants” category to increase savings 
• Track expenses to look for costs that can be cut back 
• Set adjusted targets (e.g., 30% savings instead of 20%) 
• Reassess every 3–6 months. 

Most importantly, stay ambitious with what you save, even if you need to adjust the percentages. It’s totally fine if your breakdown looks like 60:20:20 or 50:25:25 – what matters is maintaining a consistent habit that helps to better your financial standing. 

Final thoughts 

There’s no perfect number when it comes to how much money you should have in savings. Instead of comparing yourself to others, focus on building positive financial behaviours: 

• Save consistently 
• Track your spending 
• Reduce unnecessary costs 
• Prioritise future goals. 

Following the 50:30:20 rule is one of the easiest ways to start taking control of your finances. It creates a budget planner style structure that gives you clarity, reduces stress and ensures you’re always contributing towards long-term security. 

Remember, if you’re unsure where to start, a financial advisor can help you create a plan tailored to your situation, salary and goals, as well as helping to make your savings work for you with growth and investment advice. 

You don’t need to be perfect, you just need to start. 

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This article is for general information purposes and is not an invitation to deal or address your specific requirements. Any expressions of opinions are subject to change without notice. The information disclosed should not be relied upon in their entirety and shall not be deemed to be, or constitute, advice.