How Much Should You Save Each Month? A Real Framework for High Earners

High Income Doesn’t Guarantee Financial Freedom

You’re earning multiple six figures and on paper, you’re crushing it. But if you’ve ever looked at your bank account and thought, “Why don’t I feel more financially secure?” you’re not alone.

At Truly Aligned, we’ve worked with engineers, tech professionals, business owners, and executives who’ve done everything “right” in terms of career success but they still feel uncertain about their personal finances.

The truth? High income means nothing without a strategy for allocation.

Building real wealth isn’t about how much you earn. It’s about how intentionally you save, invest, and align your cash flow with your goals – month by month.

This article walks you through: How much should I be saving? And more importantly, Where should it go?

Why Earning More Doesn’t Automatically Mean Saving More

It’s a common myth: once you hit a certain income level, saving will get easier. But for high earners, lifestyle creep is real and dangerous.

Here’s what we see time and time again:

• Income doubles… and so does spending
• Big chunks of cash sit idle in checking accounts
• Investments happen sporadically (if at all)
• There’s no clear target for retirement, freedom, or financial independence

Without a strategy, even high-income professionals end up stuck in a cycle of earning and spending without building real wealth or long-term freedom.

What’s missing? A system. A structure. A benchmark for how much to save and where it should go.

The Framework: How to Structure Your Monthly Savings Plan

You don’t need to micromanage every dollar but you do need a high-level structure. Here’s a simple, strategic way to think about your monthly savings allocation as a high earner:

1. 20%–30% Toward Long-Term Wealth

This includes:

• Retirement accounts (401(k), Roth IRA, SEP IRA, Solo 401(k), Defined Benefit Plans)
• Taxable brokerage accounts (for wealth building outside retirement)
• Equity diversification strategies (if you have company stock)

Why this matters: Compounding works best with time. The earlier and more consistently you save, the more you benefit from exponential growth.

2. 10%–20% Toward Short-Term + Mid-Term Goals

Think:

• Travel funds
• A future home upgrade
• Starting a business
• Sabbatical or gap year planning

Use high-yield savings or conservative investments depending on the timeline.

3. 3–6 Months of Core Expenses in Cash Reserves

Your emergency fund should live outside your investment accounts and be easily accessible. Many high earners don’t think about this step – until they need it.

4. 0%–10% Toward “Intentional Extras”

This isn’t savings but it’s part of strategic cash flow. These are the non-essential upgrades that bring joy, like:

• Wellness retreats
• Season tickets
• Charitable giving
• Gifting to kids or parents

By setting boundaries here, you keep indulgences intentional and not reactionary.

Optimizing for Taxes, Risk, and Flexibility

Smart saving isn’t just about the amount it’s about where that money goes. Here are some ways we help clients optimize each dollar saved:

Tax Considerations

• Max out your tax-deferred space (401(k), HSA, SEP IRA, etc.)
• Use a Backdoor Roth IRA if your income exceeds limits
• Consider a Mega Backdoor Roth if your 401(k) plan allows
• Use a taxable brokerage account with long-term holdings to manage capital gains efficiently

Risk Management

• Avoid overconcentration in employer stock (RSUs, ESPPs, ISOs)
• Balance illiquid assets (e.g., business equity, real estate) with liquid investments
• Protect downside with proper insurance (disability, umbrella, etc.)

Investment Strategy

• Align investment risk with the purpose of each account
• Long-term: aggressive, growth-focused
• Mid-term: balanced
• Short-term: cash or high-yield savings

Alternative Strategies (and Who They’re Right For)

There’s no one-size-fits-all savings plan. Here’s how different approaches can work based on your priorities:

Truly Aligned Tip: Combine automated investing with quarterly check-ins. You’ll get the best of structure and adaptability.

FAQs

How much should a high-income professional save per month?
Aim to save 20–30% of your gross income toward long-term goals. If you’re behind, increase that percentage or front-load aggressively during peak earning years.

Is it possible to save too much?
Yes – if you’re hoarding cash or overfunding retirement at the expense of lifestyle or flexibility. The key is balance based on your actual goals.

Where should I keep short-term vs. long-term savings?

• Short-term: High-yield savings or money market funds
• Long-term: Tax-advantaged accounts + brokerage accounts invested for growth

How do I make saving easier to stick with?
Automate contributions. Set up transfers to separate accounts on payday. Removing friction is the best way to stay consistent.

What if I have a lot of equity compensation – do I still need to save monthly?
Yes. Equity comp is volatile and uncertain. Treat it as bonus upside, not your core plan. Prioritize consistent saving into accounts you control.

Final Thoughts: Income Creates Options. Strategy Creates Freedom.

It’s easy to think financial freedom is just about earning more. But the truth is, freedom comes from structure not just income.

When you have a savings system aligned with your goals, everything changes:

• You stop guessing
• You stop overspending
• You stop feeling like your money is scattered

Instead, you build confidence. Clarity. And wealth that supports your life not just your lifestyle.

Asset allocation does not ensure a profit or protect against a loss.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.
This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through The Wealth Consulting group, a registered investment advisor. The Wealth Consulting group, WCG Wealth Advisors and Truly Aligned, INC are separate entities from LPL Financial.