Have you ever set a savings goal and then quietly stopped following it?
Maybe you told yourself you would save five hundred dollars a month, but life happened and you dipped into it, skipped a month, or decided the number was just too high to be realistic.The problem usually isn’t your discipline. It’s that the number didn’t match your actual life.
In this episode, I’m breaking down why so many savings goals fail before they ever get started and why chasing a “should” number almost always backfires. I also share how one of my clients finally stopped raiding her savings account once we made one simple shift to her plan.
If you’ve ever felt behind because you’re not saving as much as you think you should be, this episode is for you.
In this episode you’ll learn…
[00:01:47] Why the habit of saving matters more than the amount you start with
[00:02:10] What “fake math” is and how it sneaks into even the most well-intentioned budgets
[00:05:00] Why starting with a smaller savings goal can actually get you further than going big
[00:08:45] How stopping and restarting affects the way you see yourself as someone who can manage money
[00:11:30] The mindset shift that helps you start thinking like a saver — even if you’ve never been one
[00:14:20] How to figure out a savings number that’s actually based on your life, not someone else’s rule
[00:16:50] Why your savings goal has to account for how you really spend, not just how you plan to spend
Tune into this episode of Money Files to learn how to choose a savings amount you can actually stick to so you can finally trust yourself with your money.
Are you ready to start asking for help with your finances? Apply to work with me, and let’s start working towards your financial goals.
If you loved hearing about building consistency with your money, check out Episode 143: Stop, Think, Spend: Implementing a Money Pause for Better Financial Decisions.
Transcript for “How Much Should You Save Each Month? The Answer No One Talks About”
Intro: Hi, and welcome to Money Files. I’m Keina Newell from Wealth Over Now. I work every day with professional women and solopreneurs to help them get out of financial overwhelm and shame so they can experience more flexibility and ease with their finances.
Are you ready to gain confidence and learn to manage your finances intentionally? Tune in and grab financial tips that will help you master the way you think about and manage your finances.
Keina: Hello, and welcome back to another episode of Money Files. Thank you so much for tuning in this week.
I want to talk to you about a common client question and even people that I encounter when I’m doing workshops. They will ask me, Kina, like, how much should I be saving? Right. I think there’s a lot of information out there about, you know, you needed three, six months of an emergency fund.
You need even 12 months of an emergency fund, or you should save 20% of what you make if you’re following the 50-30-20 plan. Like, there’s a lot of prescribed ways of saving. And what I’m going to talk about today might actually surprise you, but it came from a recent client conversation I was having.
I was working with a former client of mine, and we were going through and looking at her budget and working out some things because she’s in a new season of her life. And in her budget, she had about $500 that she said she was putting into savings. And so I asked her, you know, like, how much is in your savings account? And she didn’t tell me the number that I expected to hear.
Because if you’re saving $500 a month, then you should have about $6,000 year-to-year that’s going into that account. So in hearing her response, she had a couple thousand dollars in her account. And I said, so tell me, like, what’s happening with you saving money? Like, are you actually able to save money and touch it? But like, tell me your experience of actually saving.
And so she said, you know, I’ve moved across the country, so I had to dip it into it for moving across the country. Sometimes my credit card bill is a little bit higher than I would like. And so my credit card is higher, I dip into my savings.
So these are all things that I’m like, oh, she has like some fake math going on with her budget. Listen, fake math, just because you have a budget, fake math doesn’t necessarily escape you. You always have to be on the lookout for fake math, even for myself.
And I think I’m pretty good at budgeting, but fake math is also really good at talking to me because I’m also really good at justifying any purchase that I would like to make. So as we were talking in the session, I told her, I said, what if we actually look at, you said you’ve been dipping into your savings account in order to pay off your credit card. What if we look at like what you’ve actually been putting on your credit card? What if we look at the expenses that I know you’re telling yourself that, you know, this is just happening this one time, I’m just going to pay it off this once.
What if we look at those things and we actually gave them a place in your budget? So she really enjoys like collecting vinyls. I also know that she likes to travel, even though it’s so funny in the session, she’s like, Keina, but I don’t travel like I used to. I was like, yeah, but you just told me you went on a, you went to Nebraska to visit one of your girlfriends and you’re telling me how you want to go on a road trip to Tennessee.
Like that’s traveling. She had a little bit of, you know, some automatic money thoughts in there as well, where she’s telling me what she doesn’t do. And she’s not actually naming what she does do with her money, which is another common trap that we can all fall into because when we are in different seasons of life, where how we may have experienced life in the last season.
So she was a very avid traveler for so many years in her life, but that part of her life has slowed down. So her identity doesn’t necessarily align with the person who is always traveling and creating these experiences for herself, but she is still creating experiences and she’s creating memories. It just looks different.
And it looks like her meeting up with friends. So as we were reworking her budget together, she wanted to actually pay off some of the debt that she had created in the last year or so. I told her, what if we actually save a little less money? And I think that that might actually blow your mind as you’re listening to me, but I just want to, I wanted to talk about this because I think that we have ambition when it comes to what we are going to do with our finances, right? I’m going to save a thousand dollars a month because I want to catch up.
I’m going to save, you know, $1,200 a month because that’s the thing that I’m supposed to be doing. I read it somewhere. And so we go full force towards these financial goals, but we’re not actually meeting the financial goal because we’re not actually consistent, right? What happens like with my client, she had $500 a month in her budget, but then in reality, what’s happening is she’s dipping into that $500 every month because she doesn’t have enough to actually cover the ways in which she’s actually living.
So we actually scaled back the $500 a month. And I said, what if you just commit to saving $300 a month? And what if we made more space for you to be able to have some more fun money? If we made some more space for you to be able to have another savings bucket for travel so that when you are saying yes to these impromptu weekend trips, you can do that without feeling guilty. And you can visually see like the weight shift in her body, her shoulders changed, her attitude changed.
And when it comes to Kina, how much should I save? I want you to save the amount that you can be consistent with. So for her, let’s get consistent with $300 a month. We can always go back up to 500, but the reason I want you to start with where you can be consistent is because it’s going to build your savers identity.
And if you don’t actually build that savers identity, that you are a saver, you know how to save, you can manage your savings well, that you are someone who saves consistently. If you are fighting with that identity every single month, you are going to hate saving money. You are going to continue to see yourself as someone who doesn’t save.
But by saving $300 versus $500 a month, although the number looks different in your budget, although you may want to save more, you’re building confidence and you are building financial self-trust. And when we’re building confidence and we’re building this self-trust when it comes to your finances, you’re going to be creating these wins for yourself where you’re going to be like, Oh my goodness, like I haven’t had to touch my savings to pay off my credit card. And I don’t know like the last three months.
So imagine right that you have been able to pay off your credit card without actually dipping into your savings. What do you start to believe about yourself? You start to think like, Oh, guess what? I actually, maybe I know how to save a little bit of money. And just because you’re saving $300 in the beginning versus $500, it doesn’t mean that that number can’t increase over time.
But I want you to start with an amount that you can be consistent with. And you can have a conversation with yourself about I’m saving $300 this month and every single month, because I want to build that self-trust. I want to be honest about how I actually use money in my life, saving $300 versus $500.
Make sure that I get to lean into creating experiences, creating memories with my friends. And I also get to build my emergency fund. So if I give you an example of like, imagine this is you, right? You go from saving $500 to $300 a month.
Imagine you get a bonus at some point this year, and it’s $10,000. If you’ve been consistently saving $300 a month, and you feel like it’s allowed you to spend money freely, right? You have money to spend freely. You have different savings buckets to make sure you know your car, your house, whatever it is that you need to save for is taken care of.
And all of your bills are paid for. When you get that $10,000, that $10,000 is going to be able to be used in new ways for you. You most likely aren’t paying back past credit card debt, or if you’re on a credit card payoff plan, you haven’t added to that debt, right? You could boost your savings for this year.
And you could say like, oh, okay, I get to like actually boost my savings because I’m not having to compensate for these other things that I would have been compensating had I been trying to save $500 versus saving $300. Because when you go for the higher number, but you’re not actually consistent, what happens is when you’re eroding that confidence and you’re eroding your trust with yourself, then you are going to become a saver that you’re like, why does it even matter, right? I’m clearly never going to be able to do this. So you find that you give up.
And in giving up, you actually create the result of the fact that you’re not a saver and you’ll forever have this negative relationship with saving money. And it will be something that you just see yourself as never being able to do. And I don’t want that relationship for you.
And I have used this approach with myself to save less versus saving more. I think that that’s how I became a really great saver because there have been times where I remember when I was teaching, I was saving like $300 a month, I had really cheap rent. But then when I moved to DC, my rent was about almost triple of what I was paying in St. Louis.
So I was paying $600 in St. Louis. When I moved here, it was about $1,500. And so that was a really big jump.
Although I was making more money, I was living in a higher cost of living city. And so saving money became like, let me say $50 a month. But I was able to do that with some level of fidelity.
And as I earned more money, as I became a six figure earner, as I paid off debt, my ability to save changed from let me say $50 a month to let me say $500 a month to let me save $800 a month to let me save a thousand dollars a month. Like I was able to walk myself through that trajectory because I focused on being consistent. I don’t want you to be focused on what you should be doing.
I want you to focus on where you can be consistent because that is going to build your confidence. It’s going to build your self-trust. And if you’re listening to this and you’re like, okay, can I, I feel like I have that self-trust.
I feel like I have some confidence. We can talk a little bit more about one of my goals for clients is when we’re looking at saving money, I would love for them to be able to put at least 10% of whatever their net income is. So if in their checking account every single month, they net $6,000, I would love that towards their emergency fund, there’s $600 going towards that.
So that’s 10% of what they’re bringing home. That is not the same as, you know, what are you saving for travel? What are you saving for auto maintenance? Like I’m just talking pure emergency fund because I don’t want your savings mixed up into, into multiple accounts. And we can talk about that in a completely different episode, but just focusing on like, Hey Keen, if I had a benchmark, if you were giving me a benchmark, what should I go after? My standard answer is let’s say 10% of your net income of what you bring home from there.
If I gave you another push, my push would be like, let’s save 10% of what your gross income is. So if you’re netting, you know, 6,000, maybe your gross income is closer to $100,000 for the year. And so I want you to save like at least $800 a month or $840 a month.
So those are numbers you can play with and you can make a plan to like, if I’m saving, you know, if I’m starting at $300 a month, this time next year, I would love to be at $500 a month. As I, you know, get my credit cards paid down, I’m going to put intentionally put more money towards my emergency fund. And so that’s how that works.
It doesn’t mean that you’re completely abandoning what you want to do in terms of saving money, but it’s being able to also be slightly realistic and set yourself up for success. And if you want to dive a little bit deeper into this, I have another podcast about the easiest way to like save five figures. I can’t remember if that’s exactly the name, but I’ll make sure that it gets linked in the show notes, because I think that there are ways in which we can think about creating those five figure savings account.
I know everybody wants to be like, well, Kina, you know, I need to break a plateau. I need to break a threshold when it comes to saving money. And I understand those things, but when it comes to how much should I be saving, my basic answer is I want you to save what you’ll be able to save consistently period.
So if you’re listening to this episode and you’re like, Kina, I need help. I’ve been listening to your podcast and like what you’re saying resonates with me. Your clients are saying it resonates with me.
I would invite you to apply to work with me. So if you go to the show notes, you can apply there or you can go to wealthovernow.com at the top. It’ll say book a call and you can fill out a short application and then we’ll have a 60 minute consult.
I’ll ask you some questions. It may be the first time that you’ve ever talked about your finances and that’s okay. And then I’ll tell you exactly how I think I can help you and what we could achieve in five months of working together.
So thank you so much for tuning in and have a great week until next time. I will see you later. Thank you so much for listening to money files.
Outro: If you’re ready to take the next step to reach your financial goals, head to www.wealthovernow.com/appointment, and let’s get started.
