Last Updated on August 27, 2026 at 5:43 pm
“How Much Should You Save Monthly Based on Your Age and Income?” I was asked this question in an interview—a discussion. We shall save and invest together here.
I think the short but unpleasant answer is: as much as possible! This does not mean you resign yourself to saying, “I can only invest this much for my family’s circumstances and income,” and leave it at that.
Quite far from it! This means you do everything you can to increase your income (particularly if you think you are not earning enough). This means working hard throughout the day. So, no time for social media reels!
The second and equally important aspect of “saving as much as you can” is to ensure your lifestyle does not increase with your income. Of course, it can increase a little, but it should not increase as fast as your income. It should be much slower.
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No, you don’t deserve that new mobile or that fancy holiday. Of course, you should have fun today and use your money for it. But you will never invest enough if you don’t keep your spending in check.
If you party like there is no tomorrow, you guarantee there will be no tomorrow. Strike a balance between spending on current wants and investing for future needs (and wants)
Ideally, if Rs. X are your monthly expenses (that you think will continue for life, excluding expenses for your parents, siblings, children, EMI), then you should invest Rs. X towards retirement in a 50-70% equity portfolio (preferably index funds) and the rest in fixed-income instruments. This includes the investments towards EPF/NPS (mandatory employer deductions and employer contributions). This investment should be increased as much as possible each year, at least 5-10%.
Of course, this is very hard to achieve. So start with what you can invest, but be consistent. Don’t lose hope. Focus on increasing your income, and as it increases, increase your investment first. Then, consider whether a lifestyle enhancement is worth it (often, it is not and comes with other expenses).
Keep up the investing for 15-25 years to attain financial independence. There are no shortcuts to wealth.