The Grey Blog

A friend checked their balance at the end of last month, and thankfully, it was more than he expected. He hadn’t deliberately saved anything, but nothing catastrophic had happened either. I can’t remember the fine details, but I know he ended up spending it.

On the surface, it looked like a spending or discipline problem. But I had a different view, and in the following paragraphs, I’ll explain my thoughts and what I believe the best fix was, and the fix is simpler than most financial advice suggests.

Why one balance makes saving hard

When your savings and your spending money are in the same account, every pound or dollar in that account looks available. The balance doesn’t distinguish between money you’re keeping and money you’re spending.

This creates a specific cognitive problem. You make spending decisions based on whether the balance looks healthy, not based on whether you’ve set anything aside. If the number looks fine, spending feels fine. If you’ve mentally noted that £400 of that balance is “for savings,” that mental note competes with every spending opportunity you encounter between now and whenever you transfer it somewhere else, and mental notes lose that competition regularly.

The money then seeps out in small, individually reasonable amounts. A round at the bar. A delivery fee that didn’t seem worth avoiding. A subscription that renewed, and you forgot to cancel. Each decision was fine in isolation. Collectively, the balance is gone before you’ve done anything intentional with it.

The psychology of separating your money

There is a well-established concept in behavioural economics called mental accounting: the tendency people have to treat money differently depending on where it is and what they’ve labelled it as. The same £50 feels very different depending on whether it arrived as a birthday gift, a work bonus, or leftover change from a supermarket run, even though all three are identical once they’re in your account.

This tendency is usually described as a bias to be corrected. But I think it can be a useful tool. When money is in a named savings account, clearly separate from your spending account, it takes on a different psychological status. It’s not spending money. It's the holiday fund, the emergency buffer, the new laptop money. Spending it requires a conscious decision to override its purpose, which creates friction that a vague mental note never does.

The separation doesn’t have to be dramatic. A second account at the same bank, a different balance in the same app, a jar on a shelf: all of these work because they create a visual and psychological boundary between money that is available and money that is not. Artificial barriers are what make behaviour change sustainable without requiring constant willpower.

Separation is not the same as locking money away

A common hesitation about separating money is the fear of losing access to it. If something comes up, will it be there? If an emergency happens, can it be reached quickly?

The answer is yes. Separating your money is not the same as locking it away. It’s not a fixed-term account, a notice period, or a commitment you can’t undo.

What separation does is add one small step between you and the money. That step shouldn’t be a barrier for genuine emergencies. It is a barrier for the kind of casual, unconsidered spending that drains balances without leaving any clear decision behind.

This is precisely the kind of friction that works in your favour. It works passively in the background every day, without you having to actively choose to protect your money each time you open your banking app.

Simple ways to separate your money today

The simplest version of this is a second account. Open one, give it a name that reflects its purpose, and move a fixed amount into it on payday and don’t touch it until the purpose it was created for arrives.

If you have more than one goal you’re working toward, the approach extends naturally. One account for the emergency fund. One for the holiday. One for the thing you’re saving toward that doesn’t have a name yet but represents a general sense of having something to show for the year. For a method to handle several goals at once, see our piece on how to save for several goals at once.

The amount you move matters less than the consistency with which you move it. A small amount transferred every payday builds the habit and the structure, and it grows over time, even if the early contributions feel negligible. For a closer look at how this plays out in practice, see our piece on how small amounts add up.

How Pouches create separation without friction

The Pouch feature on Grey takes this idea and removes most of the friction. A Pouch is a named savings space within your Grey account. You give it a name and contribute to it from your balance. It sits separately from your spending money in the same app, clearly labelled, tracking its own balance against its own purpose.

The name is more important than it might seem. “£1,200” is abstract. “Japan trip” is not. A named Pouch for a specific goal carries the same psychological weight as money in a jar labelled on the outside. You know what it’s for, and you can see how close you are. Spending it means consciously deciding to set the goal back, which is a different decision from spending money that has no label.

Because the Pouch is within your Grey account, there’s no need for multiple bank accounts or juggling between apps.

Create your first Pouch and set money aside today.

Frequently asked questions

Why is it easier to save when money is separate?

Because money sitting beside your spending money looks spendable. When your savings are in the same account as everything else, every spending decision competes with the saving intention, and the saving intention usually loses. Separation removes the competition. The savings are in a different space with a different purpose, and spending them requires overriding that purpose consciously rather than just not thinking about it.

What is mental accounting?

Mental accounting is the tendency to treat money differently based on where it is or how it arrived, even though money is functionally identical regardless of source or location. People spend windfall money more freely than earned money, treat a bonus differently from a salary, and protect money that’s been given a specific purpose more carefully than money that sits in an undifferentiated balance. When used deliberately, it’s a useful tool. By naming and separating money for a specific purpose, you activate the same psychological protection that makes people reluctant to “break into” money they’ve mentally reserved.

Does separating money mean locking it away?

No. The money remains fully accessible. Separation creates a psychological barrier, not a legal or structural one. A Pouch in your Grey account, a second current account at your bank, or a named savings pot: all of these can be accessed immediately if needed. The purpose of separation is to make casual or unintentional spending less likely, not to make genuine access impossible. For real emergencies, the money is always there.

How many savings pots should I have?

As many as you have distinct goals, within reason. One pot per clear goal is a useful starting point: one for an emergency fund, one for a specific planned purchase or trip, one for a medium-term goal like a deposit or career break. Beyond five or six active pots, contributions start to feel too small to be meaningful, and the system becomes harder to manage. Focus on the goals that matter most right now, and add new pots as old goals are reached.

How do I start separating my money?

Start on your next payday. Before spending any discretionary funds, move a fixed amount to a separate account. It doesn’t have to be large. The first move establishes the structure and the habit, and both of those matter more than the initial amount. Name the space after what you're saving for. Set a target if you have one. Then repeat the transfer every payday until the goal is reached. The system is as simple as that, and its power comes from consistency rather than size.

There is no single correct answer to how much of each paycheck you should save. What can help, however, are guidelines and methods for determining what’s realistic for your specific income, costs, and goals.

The most common mistake in savings advice is presenting targets as fixed obligations rather than starting points. Telling someone they must save 20% of their income when their rent takes up 50% of it is great, but it isn’t always helpful. Neither is suggesting they save nothing until the perfect amount is clear. The right savings rate is the highest one you can maintain consistently, and it will change as your income and circumstances do.

This guide covers the standard guidelines, how to adapt them, and how to make saving automatic so the decision doesn’t have to happen every payday.

How much of each paycheck should you save?

The most widely cited starting point is 20% of your take-home pay. This figure comes from the 50/30/20 rule, a budgeting framework that allocates income across three broad categories.

For many people in high-cost-of-living areas, or in the early stages of their careers when income is lower, and rent takes a larger share, 20% is not realistic from day one. That’s fine. The goal is to establish a consistent saving habit at whatever level is sustainable now, and increase it over time.

A more useful framing than a fixed percentage is to build an emergency fund first. Before you think about longer-term savings goals, having three months of essential expenses set aside protects you from going into debt when something unexpected happens. Once that foundation is in place, directing additional savings toward specific goals becomes the priority.

If you're starting from nothing and 20% feels out of reach, start with 5%. On a £2,000 monthly take-home, that’s £100. It won’t build wealth quickly, but it establishes the habit and the account structure that larger contributions can flow into as your income grows. Consistently saving a small amount reliably beats irregularly saving a large amount.

The 50/30/20 rule and other savings percentages

The 50/30/20 rule divides your take-home pay into three categories

50% for needs: Essential expenses that you can't avoid: rent or mortgage, utilities, groceries, insurance, transport to work, and minimum debt repayments. If this category is consuming more than 50% of your take-home pay, which is common in high-cost cities, the other percentages have to adjust accordingly.

30% for wants: Discretionary spending: dining out, subscriptions, entertainment, holidays, and new clothes. This is the category that can be reduced most easily if you need to redirect more toward savings.

20% for savings and debt repayment. This covers everything from an emergency fund to retirement contributions to a deposit for a flat. If you carry high-interest debt, prioritising accelerated debt repayment within this 20% makes sense before directing it all toward long-term savings.

Here’s a worked example on a take-home salary of £2,400 per month:

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For someone whose needs take 60% of income, the adjusted version might look like:

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The saving percentage stays the same while the wants category absorbs the adjustment.

Alternative savings percentages

The Consumer Financial Protection Bureau notes that the right savings rate varies significantly by household size, income level, and financial goals. Some financial planners suggest directing the first 10% of income to retirement savings before anything else, treating it as non-negotiable. Others advocate a flat 1% annual increase, so someone saving 5% today saves 6% next year, 7% the year after, and reaches 20% over time without a single dramatic change.

The common thread across all frameworks is that you should consistently save, increase it gradually, and automate it so the decision doesn’t require willpower each month.

How to set your own savings target

A more reliable method than applying a percentage is working backwards from your actual goals.

List every financial goal you’re currently saving toward or know you should be: an emergency fund, a holiday, a deposit, a career break fund, or retirement. Give each one a target amount and a date. Divide each target by the number of months until the deadline. This gives you the minimum monthly contribution required for each goal.

Add the required contributions together. That’s your savings floor. It’s the minimum you need to save each month to hit every goal on the current timeline. If it’s more than you can currently direct toward savings, something has to give: a timeline extends, a target reduces, or spending in another category decreases.

For people with irregular income, freelancers, contractors, and commission-based workers, a fixed percentage works better than a fixed amount. Saving 15 or 20% of whatever comes in means savings scale with income without requiring monthly adjustments. In low-income months, contributions are lower. In high-income months, they're higher. The percentage stays consistent.

For decisions about whether to direct savings toward short-term goals or longer-term investments, see our guide on saving vs investing. The answer varies depending on your timeline and the specific goal. For people in economies where local currency devaluation is a concern, consider holding savings in a stable currency when structuring your emergency fund and medium-term savings.

How to automate saving every payday

The most reliable savings system is one that doesn’t require a decision each month. When saving is automatic, it happens in good months and difficult months equally, without relying on remembering or on having enough willpower to resist spending first.

The principle is called paying yourself first. Before any discretionary spending, before any non-essential transfers, a fixed amount moves from your income account to your savings account on payday. What remains in the income account is what you spend. You never see the savings as available.

Here’s how to set it up:

Step one: Decide your monthly contribution amount or percentage. Use the worked method above if the right figure isn’t clear.

Step two: Set up a standing order or automatic transfer to leave your account on the same day your salary arrives, or the day after.

Step three: Direct that transfer to a separate account or named goal, not your current account. When savings sit in the same account as spending money, they get spent. A named goal with a visible target and a separate balance is significantly harder to spend casually.

Grey's Pouch feature lets you set money aside for each financial target you're working toward. Each Pouch is named, has a target amount, and is separate from your main balance. You can also save part of it in USD if protecting against local currency depreciation is relevant to your situation. The combination of automation and separation is what makes saving consistent over time rather than occasional.

Set up a Pouch goal with Grey and move a set amount aside every payday at grey.co/pouch.

Frequently asked questions

How much should I save per paycheck?

The 50/30/20 rule suggests saving 20% of take-home pay. In practice, the right amount is the highest percentage you can save consistently, given your actual income and costs. Starting at 5 to 10% is reasonable if 20% isn't currently achievable. The priority is establishing a consistent habit and increasing the percentage incrementally over time, particularly when income rises.

Is saving 20% of income enough?

For most people at most stages of life, 20% is a solid savings rate that covers an emergency fund, retirement contributions, and medium-term goals if maintained consistently over time. Whether it's "enough" depends on your specific goals, your timeline, and when you start. Someone who starts saving 20% at 22 is in a very different position from someone who starts at 42. Earlier is always better, and more is always better, but 20% consistently over a long period produces substantial results.

What is the 50/30/20 rule?

The 50/30/20 rule is a budgeting framework that divides take-home pay into three categories: 50% for needs (rent, utilities, groceries, insurance, minimum debt payments), 30% for wants (dining out, subscriptions, entertainment), and 20% for savings and debt repayment. It's a starting structure, not a fixed rule. People in high-cost areas often need to allocate more to needs, which adjusts the other categories accordingly.

Should I save or pay off debt first?

It depends on the interest rate on the debt. High-interest debt (above 7 to 8%) typically costs more than savings earn, so accelerating repayment on high-interest debt before building savings beyond an emergency fund usually makes financial sense. For low-interest debt (below 5%), it's generally reasonable to save and repay simultaneously. The exception is an emergency fund: having at least one to three months of essential expenses saved before aggressively paying down debt protects you from going further into debt if an emergency occurs during repayment.

What happens if I can't save 20% right now?

Save less. Start with whatever is realistic, 5%, 3%, even £50 a month, and increase it gradually. A consistent small saving habit is more valuable than an inconsistent large one. Each time your income increases, direct a portion of the increase toward savings before adjusting your spending. Over several years, incremental increases compound into a meaningful savings rate without requiring a dramatic change at any single point.

Most financial advice assumes you have a safety net. Emergency fund guidance tells you how big that net should be. What it rarely covers is what the fund is for, how to calculate your specific number, and where the money should sit so it’s genuinely available when you need it without quietly losing value while it waits.

This article covers all three: a plain definition of what an emergency fund is and isn’t, a worked method for calculating your own target, and the practical question of where to hold the money once you’ve built it.

What is an emergency fund?

An emergency fund is a reserve of money held separately from your everyday spending, set aside specifically to cover costs that are unexpected, essential, and cannot be covered from regular income alone.

The word “emergency" is doing some heavy lifting in that definition. Not every unexpected expense qualifies. An emergency fund generally covers:

• Job loss or sudden income reduction
• Medical bills not covered by insurance
• Urgent home repairs (a broken boiler, a roof leak)
• Car repairs that affect your ability to work
• Travel for a family crisis

It does not cover a sale you didn’t expect to find, a holiday that came up at the last minute, or a new phone because yours is slow. Those are wants, not emergencies, and funding them from an emergency reserve defeats the purpose of having one.

The reason an emergency fund matters is simple: without one, an unexpected cost becomes debt. A £1,200 boiler repair that you can’t cover from income goes on a card at 20% interest or, worse, goes unfunded until a problem that was manageable becomes critical. An emergency fund converts a financial emergency into an inconvenience. That is the entire point of it.

The fund should be accessible quickly, ideally within one to two business days. It should not be invested in assets that can lose value at the moment you need to draw on them. And it should be separate from your current account, because money in your daily spending account has a way of becoming daily spending.

How much should you have in an emergency fund?

The Consumer Financial Protection Bureau recommends saving enough to cover three to six months of essential expenses. This is the standard guidance, and it holds up for most people.

Step one: calculate your monthly essentials.

Essential expenses are the costs that don’t stop if your income does. They are the non-negotiables:

• Rent or mortgage
• Utilities (electricity, water, gas, internet)
• Groceries
• Insurance premiums
• Minimum debt repayments
• Transport to work (if applicable)
• Childcare or dependent care (if applicable)

It is almost always lower than your total monthly spending, which is the point. Your emergency fund covers survival costs, not lifestyle costs.

Worked example:

At the standard three-to-six-month range, this person needs £4,800 to £9,600. Their starting target should be £4,800 (three months), with a longer-term target of £9,600 (six months).

Step two: adjust for your circumstances.

Three months is the minimum. Six months is a more comfortable target for most people. But some situations warrant aiming higher.

Save toward the higher end (six months or more) if:

• Your income is irregular. Freelancers, contractors, and commission-based workers can have income that disappears for a month or two without warning. A larger buffer covers longer gaps.
• You are the sole earner in a household. If your income stops, the whole household stops. Two incomes provide a natural buffer that a single income doesn’t.
• You work in a sector where finding a new role takes time. Niche industries, senior roles, and specialist fields often have longer job search timelines.
• You have dependants. Children, elderly parents, or anyone financially reliant on you increases the cost of an income gap and the stakes of not having one covered.

Three months is a reasonable starting point for someone with a stable income from employment, no dependants, and a partner who also works. Six months is a more appropriate target for most other situations.

Where should you keep your emergency fund?

The two requirements for an emergency fund are accessibility and stability. The money needs to be available quickly when you need it, and it needs to hold its value while it waits.

These requirements create some sort of tension. The highest interest rates tend to come with notice periods or investment risk. Easy-access accounts pay less. The right answer for most people is not to optimise for return but to optimise for availability and protection.

Separate from your current account.
The most important thing is that the fund is in a different account from your daily spending because, psychologically, money that is seen as available. Most people have a harder time resisting the urge to spend money they can see in their balance. A separate account, ideally at a separate provider, removes the fund from your daily financial view without making it inaccessible.

Easy access
Avoid fixed-term accounts or investments for emergency funds. The scenario you’re protecting against may require the money within 48 hours. A 30-day notice savings account or a stock market account that happens to be down when you need it defeats the purpose.

Consider the currency you hold it in
If your home currency has historically depreciated against major global currencies, holding an emergency fund entirely in local currency means the fund may be worth significantly less in real terms at the moment of an emergency than it was when you built it. Holding a portion of your emergency fund in a stable currency like USD provides a hedge against local currency devaluation without locking the money into investments or inaccessible vehicles.

Grey lets you hold your emergency fund in USD in a separate account from your everyday spending. You can set up a Pouch specifically for your emergency fund, giving it its own named space, and a visible balance that sits apart from your main account. The fund is accessible when you need it, clearly labelled so you’re less likely to dip into it casually, and held in a stable currency if that matters for your situation.

For more on this decision, see our guide on where to keep your emergency fund.

Open a Grey account, hold your emergency fund in USD, and ring-fence it in a Pouch goal so it is there when you need it, at grey.co/pouch.

How to build an emergency fund from zero

The target can feel large, particularly at the beginning. A £9,600 six-month fund is a significant sum, and trying to save it all at once is neither realistic nor necessary. Building it consistently over time is.

1. Set your target: Use the worked method above to calculate your monthly essentials, multiply by three to start, and put that number somewhere visible. That is what you’re working toward.
2. Automate a monthly transfer: On payday, before any discretionary spending, transfer a fixed amount to your emergency fund account. Start with whatever is realistic given your current income, even if that’s £50 or £100 per month. The habit matters more than the amount at this stage. A fund that grows slowly is infinitely more useful than one that never gets started.
3. Top up with windfalls: A tax refund, a bonus, a freelance project that pays more than expected: direct a meaningful portion of any irregular income straight to the emergency fund before it can be absorbed into general spending. Windfalls are one of the fastest ways to close the gap between where your fund is and where it needs to be.
4. Don’t stop once you hit three months: Three months is the minimum, not the goal. Once you reach the three-month mark, keep the automatic transfer running at a lower rate until you reach six months.

For guidance on how to size your monthly contribution relative to your income, see our guide on how much to save from each paycheck. Once your emergency fund is fully built, shifting attention to longer-term goals is the natural next step; our guide on longer-term savings goals by age covers what to prioritise from there.

Frequently asked questions

How much should I have saved in an emergency fund?

The standard guidance from the Consumer Financial Protection Bureau is three to six months of essential expenses. Essential expenses are the costs that don't stop if your income does: rent or mortgage, utilities, groceries, insurance, and minimum debt repayments. Calculate your monthly essential total and multiply by three for a starter target. Adjust toward six months or higher if your income is irregular, you are the sole earner in your household, or you have dependents.

Where should I keep my emergency fund?

In a separate account from your daily spending, accessible within one to two business days, and not exposed to investment risk. Easy-access savings accounts or dedicated goal-based accounts are the most suitable options. For people in high-inflation economies or countries with depreciating currencies, holding part of the fund in a stable currency like USD adds a layer of protection against the fund losing real value while it waits to be used.

Is three months enough for an emergency fund?

Three months is the minimum, not the ideal. It covers a short income gap or a single major expense for most people. Six months is the more appropriate target for anyone with irregular income, a single-earner household, dependants, or a role where finding new work takes time. If your circumstances are stable, you're employed, have dual income, and have no dependants, three months is a reasonable first milestone on the way to six.

Should an emergency fund be in a savings account?

Yes, in the sense that it should be somewhere separate from your current account and accessible within a short window. It should not be in a fixed-term account that charges a penalty for early withdrawal, and it should not be invested in stocks or funds that can fall in value at the moment you need to draw on them. The goal is stability and accessibility, not growth. The return on your emergency fund is irrelevant compared to the certainty that the money will be there, at roughly the right value, when a genuine emergency arises.

Can I invest my emergency fund?

No. This is a common and costly mistake. The defining feature of an emergency is that it arrives unexpectedly and often at inconvenient times. If your fund is invested and markets are down at the moment you need to draw from it, you are forced to sell at a loss or go into debt instead. Emergency funds are not investment capital.  Keep them in a stable, accessible account and invest separately from whatever remains after the fund is fully built.

Where to keep your emergency fund is not simply a question of finding an account that pays interest. The place you choose needs to give you quick access when an unexpected bill, job loss or family expense arrives, while also helping your money retain its value over time. Keeping emergency savings in an account that is difficult to access can create unnecessary stress when you need the money most, while leaving everything in cash can expose you to inflation and currency movements.

The simplest approach is to keep your emergency fund somewhere separate from your everyday spending account, with access available within a day or two. A dedicated savings account can work well because the money remains accessible without sitting in your main account where it may be easier to spend.

Currency matters too, particularly if your local currency is unstable. Holding part of your emergency fund in a stable currency such as USD can help protect its real value against inflation. The right balance depends on where you live, where your future expenses will arise and which currencies you regularly use.

Where should you keep an emergency fund?

An emergency fund needs to be available when life does not go according to plan, so the account you choose matters almost as much as the amount you save. The best place should protect your money, give you reasonably quick access and make it less tempting to spend on everyday purchases.

A strong emergency fund should do four things:

• Keep your money safe: Keep the money with a reputable bank or financial institution where your savings are protected under the relevant deposit protection rules.
• Stay liquid: You should be able to access the money within a day or two without paying significant withdrawal penalties or waiting for a long transfer period.
• Be separated: Keeping emergency savings in a separate account reduces the temptation to dip into the fund for regular spending.
• Protect its value: Interest can help offset inflation, while holding part of your savings in a stable currency may be worth considering if your local currency frequently loses value.

If you earn in USD, get paid by global clients, or regularly spend in foreign currencies, a dedicated account offers a practical balance between access, safety and keeping the money separate from everyday spending.

Best savings accounts for an emergency fund: HYSA vs MMA vs checking

The right account for an emergency fund needs to balance safety, access and the opportunity to earn interest. High-yield savings accounts (HYSAs) and money market accounts (MMAs) can offer competitive yields while keeping deposits protected by FDIC or NCUA insurance. Checking accounts make everyday spending easier, but usually offer little or no interest.

When choosing where to keep an emergency fund, consider how quickly you may need the money and whether earning interest or having immediate access matters more. The comparison below looks at the main differences in access, yield and safety.

When choosing where to keep an emergency fund, ask yourself one honest question: Would I be tempted to spend this if it’s too easy to reach?
Also read: How to build an emergency fund when you get paid in a foreign currency

Emergency fund vs general savings: what is the difference?

An emergency fund and general savings may sit in similar accounts, but they serve very different purposes. The emergency fund is reserved for unexpected situations that affect your ability to meet essential expenses, while general savings can be used for goals you have planned and can anticipate.

• Emergency fund: This is your financial safety net for situations such as losing your job, facing an unexpected medical bill or needing urgent car repairs. It should remain separate from everyday spending and be easy to access when a genuine emergency arises.
• General savings: This money is set aside for planned expenses and personal goals, such as a holiday, wedding, new car or home deposit. Because you expect to spend it, there is less reason to treat the balance as untouchable.

Keeping the two separate can make it easier to protect your emergency fund while still allowing you to enjoy the money you have deliberately saved for other priorities.

Why the currency you save in matters

The value of an emergency fund is not determined only by the number on your balance. Inflation can reduce what that money buys, while a fall in the value of your local currency can make imported goods, international bills and dollar-priced services more expensive. This is why the currency you save in can matter, particularly when some of your future expenses are priced in USD.

Consider a simple example. Suppose you save the equivalent of $1,000 in a local currency at the beginning of the year. If that currency loses 20% of its value against the dollar over the next 12 months, the same local-currency balance would be worth only about $800 in USD. Holding $1,000 in USD instead would preserve the dollar value, although it would not eliminate inflation or other risks.

For people who earn internationally, Grey provides eligible users with USD accounts, making it possible to hold money in dollars rather than converting everything into local currency immediately. You can set up a Grey Pouch to set some of that money aside and keep your savings separate from everyday spending.

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Frequently asked questions

Should an emergency fund be in a high-yield savings account?

A high-yield savings account can be a good place for an emergency fund because it keeps your money accessible while allowing you to earn interest. Choose an account with low fees and appropriate deposit protection. The priority should be safety and access, not simply finding the highest rate.

Is it safe to keep an emergency fund in dollars?

It can be, particularly if you expect some future expenses in USD or your local currency is prone to losing value. However, holding dollars does not remove inflation or currency risk completely. Consider keeping enough in the currency you are most likely to need for everyday emergencies.

How quickly should I be able to access my emergency fund?

Ideally within a day or two., You should be able to access your emergency fund quickly enough to cover an unexpected expense without relying on credit. A dedicated savings account with straightforward transfers can work well, while accounts with withdrawal penalties or long lock-in periods may be less suitable.

Should an emergency fund be kept separate from everyday savings?

Yes. Keeping your emergency fund in a separate account can make it easier to avoid spending the money on routine purchases or planned expenses. It also creates a clear boundary between money reserved for unexpected costs and savings intended for holidays, major purchases or other financial goals.

How much money should you keep in an emergency fund?

A common target is 3–6 months of essential expenses, but the right number depends on how stable your income is, how many people rely on you, and how easy it would be to replace income if you lost it. If saving that much feels overwhelming, start with a smaller milestone (for example one month of essentials) and build from there.

Should you invest your emergency fund?

Usually, no. Emergency funds are for stability and quick access, not long-term growth. Investments can fall in value at the wrong time, and selling may take longer than you want. If you want to invest, do it with money that is separate from your emergency buffer.

Retirement savings rarely feel urgent when you are in your 20s, particularly when your income is still developing and most of what you earn is already committed to rent, family responsibilities, debt, travel or simply building a life. As your career progresses, however, your priorities begin to change. By your 30s, you may be earning more and able to put more aside, while your 40s and 50s often bring a different question: is what I have saved actually enough for the future I want?

This is where Retirement Savings Goals can provide a useful point of reference. One commonly used benchmark suggests having about one times your salary saved by 30, three times by 40, six times by 50 and around eight to ten times your salary by retirement.

These figures should not be treated as strict rules because the right amount depends on your income, lifestyle, pension arrangements, investments and the age at which you plan to retire. Instead, they offer a simple way to see where your savings stand and whether you may need to increase your contributions as your income and circumstances change.

Also read: How to build an emergency fund when you get paid in a foreign currency

How much should you have saved at each age?

Retirement savings benchmarks are designed to give you a simple way to judge whether your savings are broadly keeping pace with your income as you move through different stages of your working life. The familiar figures, such as one times your salary by 30, three times by 40 and six times by 50, are not random numbers. They come from financial planning models that make assumptions about when someone starts saving, how much they contribute each year, investment growth and the income they may need to maintain their lifestyle after leaving work.

One widely used approach assumes that a person begins saving around age 25 and puts about 15% of their annual income towards retirement. The aim is to build enough wealth over time to replace part of their pre-retirement income, with the required savings increasing as retirement gets closer.

To use the benchmarks, take your current annual salary and multiply it by the target for your age. If you earn $70,000 at 40, for example, a 3x benchmark would suggest $210,000 in retirement savings. These figures are guides rather than rules, so your actual target may be higher or lower.

If you are deciding how to balance saving and investing across different time horizons, see our guide to saving vs. investing.

How much should you have saved by 30?

By 30, a commonly used retirement savings target is about one times your annual salary. So, if you earn $50,000 a year, the benchmark would put your retirement savings at around $50,000. Reaching that figure can be difficult when you are still building your career, paying off debt or dealing with major expenses, so it is better viewed as a guide than a pass-or-fail test.

Starting early matters because your first contributions have more time to grow. Money invested for retirement can earn returns, which can then generate further returns over the years. This compounding effect becomes increasingly valuable when you give your savings several decades to build.

The bigger lesson is not to wait until your income is higher before saving. Even if you cannot reach the 1x target by 30, regular contributions can put you on a stronger path. Increasing the amount you save as your salary grows can also help you catch up and build towards the higher Retirement Savings Goals that apply in your 40s and 50s.

Also read: Should you save in dollars, pounds or euros?

Retirement savings targets at 40, 50 and 60

By ages 40, 50 and 60, your retirement savings target increases as your income and working years progress. Common Fidelity benchmark frameworks suggest aiming for around 3x your annual salary by 40, 6x by 50 and 8x by 60. The examples below show what those multiples look like at two different salary levels.

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These figures are useful for checking your progress, but they should not become a source of unnecessary pressure. Your retirement savings target depends on factors such as your income, lifestyle, retirement age, pension and investments. Use the multiples as a guide, then adjust your savings plan to reflect your own circumstances and the retirement you want.

Behind your retirement target? This can help you catch up

Falling below the retirement savings benchmark for your age does not mean you have missed your chance to build a comfortable retirement. What matters is what you do from this point forward, particularly if your income has increased and you now have more room to save than you did earlier in your career.

Several changes can help you close the gap over time:

• Increase your savings rate: Raising your retirement contribution by even a few percentage points can make a meaningful difference over several years, especially when your income increases.
• Put salary increases to work: Instead of allowing every pay rise to become additional spending, direct part of each increase towards retirement.
• Reduce investment fees: High fees can quietly erode the returns on your savings over the long term. Review your pension and investment accounts to understand what you are paying.
• Make the most of employer contributions: If your workplace offers a pension contribution or matching scheme, contribute enough to receive the full benefit where possible.
• Keep investing consistently: Avoid trying to make up lost ground through unnecessarily risky investments. Consistent contributions and a suitable long-term investment strategy can give your savings more time to grow.

If you are rebuilding, it can help to track it somewhere visible, you can set set money aside for long-term goals in a Pouch.

Protecting your retirement savings when you earn and live across currencies

Retirement savings can lose value in practical terms when the currency you save in weakens against the currency you expect to use later. This matters more for people who work across borders, receive income in different currencies or expect to retire in another country. Holding part of your long-term savings in a stable, widely used currency can provide some protection against these movements, although it does not remove currency risk entirely.

The key is to avoid putting all your retirement money into one currency simply because it feels safer today. Consider where your future expenses will be, which currencies you earn in and how often you may need to convert your savings.

For people who receive international income, Grey makes holding and spending multiple currencies simple. You can receive supported foreign currencies, hold balances and convert funds when needed, rather than converting every payment immediately into your local currency. This can give globally mobile savers more control over when they exchange money and how they manage their international finances.

Frequently asked questions

How much should I have saved by 30?

A commonly used retirement benchmark is to have around one times your annual salary saved by age 30. For someone earning $60,000, that would mean about $60,000. It is a guide rather than a strict requirement, particularly if you started saving later or had competing financial priorities.

Is it too late to start saving at 40?

Starting at 40 is not too late. You may have fewer years for your money to grow, but increasing your contribution rate and investing consistently can still build substantial retirement savings. Review your current position, set a realistic target and increase contributions when your income allows.

How much do I need to retire?

There is no single retirement savings figure that works for everyone. The amount you need depends on your expected spending, retirement age, income sources, healthcare costs and investment returns. Estimating your yearly retirement expenses can give you a clearer starting point for setting a personal savings target.

Should I save more if I am behind my retirement target?

If your savings are below the benchmark for your age, increasing your contribution rate can help close the gap. Consider directing part of each pay rise towards retirement, reducing unnecessary investment fees and taking full advantage of any employer pension contributions available to you.

Does my salary affect my retirement savings target?

Yes. Many retirement benchmarks are based on multiples of your annual salary, so a higher income produces a higher target. However, salary alone does not determine how much you need. Your spending habits, pension, investments, retirement age and expected lifestyle should also shape your personal goal.

When we think about keeping money aside, it’s easy to picture putting aside $50, $100 or even more at once. But what about the smaller amounts? The $0.50 left after a purchase. The $2 you could put aside today. The few dollars that might otherwise sit in your balance until you spend them without really noticing.

Individually, they might not seem important. Together, and given enough time, they can tell a very different story. That’s the idea behind saving your spare change. Instead of waiting until you have a large amount available to save, you start with what you have and let consistency do the heavy lifting.

Do small amounts of money really add up?

They can, and you don’t have to save much at a time to start seeing a difference. Think about $1. Put it aside once, and you have $1. Do it every day, and you’ll have $30 or $31 by the end of most months. Keep going for a year, and that becomes $365. The same idea applies to even smaller amounts. What matters is how often you save them and how long you keep going.

It can also help to keep your savings separate from the money you use every day. When those small amounts have their own place, it’s easier to leave them alone and see how much you’ve managed to put aside. You might still be wondering how much difference a few cents at a time can actually make. So, let’s look at the numbers.

The maths of saving small, regularly

Imagine you make 30 purchases in a month and put aside an average of $0.50 each time. That would give you $15 by the end of the month. Keep doing it for a year and you’d have $180. Increase the average amount to $1, and you’re looking at $30 a month, or $360 over a year.

Here’s how a few different examples could play out:

These are just illustrative examples. The amount you actually set aside a will depend on how often you spend and how much you put aside each time.
Still, the maths shows why small amounts are easy to underestimate. $0.50 might not change your finances today, but saving it repeatedly can turn it into $180 over a year.
And you don’t necessarily have to remember to move that money yourself after every purchase. That’s where round-ups come in.

What are round-ups?

Round-ups are a way to pool the spare change from your everyday purchases automatically. Say you make a card payment of $4.60. With round-ups, the transaction can be rounded up to $5, with the extra $0.40 set aside for you. Spend $12.25, and another $0.75 can go towards your other things.

The individual amounts are small, but each eligible purchase gives you another opportunity to save. Instead of waiting until the end of the month to see what you have left, you can build your savings little by little as you spend. It turns something you already do regularly, paying for everyday purchases, into a chance to put a little money aside.

How to make it automatic

Most of us have probably told ourselves, “I’ll save whatever is left at the end of the month.” Then the end of the month arrives, and there isn’t much left.

One way to make keeping money for future plans easier is to stop relying on yourself to remember to do it. When part of the process happens automatically, you can put money aside regularly without having to make the decision again and again.That’s especially useful when you’re starting small. Moving $0.50 or $1 manually might not feel worth the effort every time, but automating those small contributions means they can keep happening in the background.

Over time, consistency can matter more than having one particularly good month. You might save $20 one month and $8 the next, but you’re still making progress. You can use the same approach for different goals. Maybe you want to build an emergency fund a little at a time, save for a trip or simply create a small buffer for unexpected expenses. The goal doesn’t have to be huge. What matters is creating a habit you can keep.

How to turn on Round-ups in Grey

If you use your Grey card for everyday purchases, Round-ups can help you turn those transactions into small contributions towards a Pouch.

Once you turn on Round-ups, Grey rounds eligible card payments up and moves the difference into the Pouch you choose.

For example, if you spend $7.30, the purchase can be rounded up to $8 and the remaining $0.70 goes into your Pouch.
You carry on spending as usual, while those small amounts collect separately.

To get started, open Grey and:

1. Go to Pouch.
2. Turn Round-ups on.
3. Choose the Pouch where you want your round-ups to go.
4. Use your Grey card as usual and let your spare change start collecting.

You can check your Pouch whenever you want to see how those small contributions are growing. Saving doesn’t always need a big beginning. Sometimes, it can start with $0.20 after lunch, $0.60 after a coffee or $0.75 after another everyday purchase. Give those amounts somewhere to go, keep doing it, and the maths can do the rest
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Open a Pouch today
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Frequently asked questions on saving small amounts of money

Do small amounts of money really add up?

Yes. Small amounts can become more meaningful when you keep them aside consistently over time. For example, a $1 a day would give you $365 after a year.

What are Round-ups?

Round-ups automatically set aside the spare change from eligible card purchases. If you spend $6.40, for example, the transaction can be rounded up to $7 and the extra $0.60 can go towards your future plans.

How much can Round-ups keep in a year?

It depends on how often you use your card and how much is rounded up from each eligible purchase. For example, an average of $0.50 saved across 30 transactions each month would equal $180 over a year.

Is automatic saving better than saving manually?

Both can work. Automatic saving can make consistency easier because you don’t have to remember to transfer money yourself each time. You can also combine automatic contributions with larger manual transfers when you have more money available to save.

Do round-ups happen every time I use my card?

Round-ups apply to eligible card transactions when the feature is turned on. The amount set aside will vary depending on the value of each purchase.

How do I turn on Round-ups in Grey?

Open the Grey app, go to Pouch and select Round-ups. From there, you can turn the feature on and choose the Pouch where you want your spare change to go.

A late client payment was what first pushed me to build an emergency fund. As a freelancer getting paid in dollars, though, putting money aside wasn’t quite as simple as choosing an amount each month.

My income could vary, and I also had to decide if it made more sense to keep my emergency savings in dollars or convert them.

If you earn in a foreign currency, these are questions worth considering when building your own emergency fund.

If you’re figuring out how to build an emergency fund on a variable or foreign-currency income, a common target is three to six months of essential expenses. You don’t need to get there all at once. Here’s how to start with what you have and build from there.

What is an emergency fund?

An emergency fund is money you keep specifically for expenses you didn’t plan for. Think of it as your financial backup for the moments when life decides to ignore your budget.

It could cover your expenses if you lose a source of income, pay for an urgent repair, replace a laptop you need for work, or help with another essential cost that comes out of nowhere.

The key word here is emergency. A holiday you’re planning or a new phone you want to buy shouldn’t come out of this fund. Those are expenses you can plan for separately.

This distinction can be especially important for freelancers, contractors, and anyone with an irregular income. If a client pays late or you have a quieter month, you may not have another paycheque arriving on a predictable date. Your emergency fund gives you a buffer so you’re not relying entirely on your next payment.

The same applies when you earn in a foreign currency. Your income may be affected by exchange rates when you convert it into the currency you use for everyday expenses, so having money specifically reserved for unexpected situations can give you more flexibility.

Why an emergency fund matters even more for freelancers

If you freelance, irregular income isn't always just about earning a little more one month and a little less the next. Sometimes, there may be a gap between projects or payments altogether.

A 2025 survey by Leapers found that 53.4% of freelancers had experienced a significant period without income because they couldn't find work during the year. And while some had substantial financial buffers, 28% said their emergency savings would last eight weeks or less.

That's where having money specifically reserved for emergencies can make a real difference. It gives you something to fall back on when work slows down, a client pays late, or an unexpected expense arrives during an already quiet month.

The United States Consumer Financial Protection Bureau also recommends using larger or one-off payments to build emergency savings, rather than relying solely on fixed monthly contributions.

How much emergency fund do you need?

A common starting point is enough to cover three to six months of essential expenses, but the right amount depends on your own costs and how predictable your income is.

Start by adding up the expenses you couldn’t easily pause if your income stopped: rent or mortgage payments, groceries, utilities, transport, insurance, debt repayments and other essential bills.

If those expenses total $2,000 per month, for example, your targets could look like this:

If you earn in a foreign currency but spend mainly in another, calculate your target based on the currency of your essential expenses first. That gives you a clearer picture of what the fund actually needs to cover.

You can then decide which currency, or combination of currencies, makes the most sense for keeping that money.

And remember, three to six months is a reference point, not a starting requirement. Your first goal could be $500, one month of expenses or another amount that feels achievable.

If your income varies significantly from month to month, you may eventually feel more comfortable towards the higher end of the range.

Where should you keep your emergency fund?

Your emergency fund should be separate from the money you use every day, but still easy to access when you need it. Keeping it in a dedicated account or savings space can make it easier to know what’s available to spend and what’s there for emergencies.

If you get paid in a foreign currency, there’s one more thing to think about: which currency should you keep it in?

You could keep some in the currency you earn and some in the currency you use for your essential expenses. It really comes down to where you live, how you get paid and what you’re most likely to need the money for.

A multi-currency account also gives you the flexibility to hold money in the currency you earn instead of converting everything as soon as you get paid.

Just keep exchange rates in mind. If you save in one currency but need to spend the money in another, its value may have changed by the time you convert it.

How to build an emergency fund on an irregular income

When you don’t receive the same salary on the same date every month, advice like “save $500 every payday” might not be particularly helpful.

Instead, you can build your emergency fund around the money that actually comes in.

1. Pay yourself first

When a payment arrives, decide what goes into your emergency fund before you start spending the rest.

It doesn’t need to be a huge amount. Even moving a small amount immediately creates a habit of treating your emergency fund as part of your financial priorities rather than something you contribute to only if there’s money left at the end of the month.

2. Use a percentage instead of a fixed amount

This is the method I find particularly useful for irregular income.

Instead of deciding that you need to put aside exactly $200 every month, choose a percentage of each payment. If you decide on 10%, for example, a $1,000 payment would add $100 to your emergency fund, while a $3,000 payment would add $300.

You contribute more during stronger months and less when your income is lower.

The percentage itself is up to you. The important thing is choosing something realistic enough that you can keep doing it.

3. Make small amounts count too

Not every contribution has to come from a big client payment.

Small amounts can quietly build your emergency fund over time, particularly when the process happens automatically.

One way to do this is through Round-ups. Instead of manually moving money every time you spend, the difference between your purchase and the rounded amount can be put aside automatically.

For example, a $7.60 card payment could be rounded to $8, with the extra $0.40 going towards your fund.

It won’t build three months of expenses overnight, but combined with your regular contributions, it can help keep your fund moving in the right direction.

4. Add more when you have a good month

Irregular income has an upside too: some months may be much better than expected.

When that happens, consider putting a little more into your emergency fund rather than immediately increasing your spending.

You don’t have to save every extra dollar. The idea is simply to use stronger months to make up for the months when contributing is harder.

5. Review your target every few months

Your emergency fund shouldn’t be a number you calculate once and never look at again.

Rent can increase. You might move countries, take on new financial responsibilities, or see your average monthly expenses change.

Check your target every few months and ask whether it would still cover the number of months you originally planned for.

And if you ever need to use the fund, that’s exactly what it’s there for. Once things settle down, you can start building it back up again.

How to start your emergency fund with Grey

If keeping your emergency money separate is the part you struggle with, Pouch gives you a dedicated space for it inside Grey.

You can create an Emergency Pouch, give it a target, and keep the money separate from your everyday Grey balance. Pouches are available in USD, EUR, and GBP, which can be particularly useful if you already receive income in one of those currencies.

For example, if you get paid in USD, you can create your emergency Pouch in USD and fund it directly from your USD balance. You can also fund a Pouch from another supported currency, with the applicable conversion details shown before you confirm.

You can then turn on Round-ups and choose your Emergency Pouch as the destination. Spare change from eligible Grey card payments will automatically go into that Pouch, adding to the contributions you make yourself.

You can track your progress towards your target in the app, while keeping the money separate from what you use for everyday spending.

Your emergency fund doesn’t need to start with thousands of dollars. The important part is giving it a place and starting with an amount that works for you.

Open an Emergency Pouch and make your first deposit today.

Frequently asked questions

How much should I put in an emergency fund?

A common target is enough to cover three to six months of essential expenses. Your ideal amount depends on your monthly costs, income stability, financial responsibilities, and how quickly you could replace lost income. If that target feels too large right now, start with a smaller amount and build from there.

Is $1,000 enough for an emergency fund?

$1,000 can be a useful first target, especially if you’re starting from zero. It may cover smaller unexpected expenses without affecting your everyday budget. Over time, you can continue building towards an amount that covers several months of essential expenses.

Should I build an emergency fund if my income is irregular?

Yes. An emergency fund can be particularly useful when your income changes from month to month because it gives you a buffer during quieter periods or when payments arrive later than expected. Instead of contributing a fixed amount, consider putting aside a percentage of each payment you receive.

Where should I keep my emergency fund?

Keep your emergency fund somewhere separate from your everyday spending but easy to access when needed. Depending on your needs, this could be a dedicated account, a high-yield savings account, or a separate money-management space. Consider accessibility, fees, withdrawal restrictions, interest, and the currency you’ll eventually need.

Should I keep my emergency fund in USD?

It depends on how you earn and spend your money. If you’re paid in USD and expect some future expenses to be in USD, keeping part of your emergency fund in dollars may make sense. If most of your essential expenses are in another currency, consider how exchange-rate movements could affect the amount available when you need to convert it.

Should I pay off debt or build an emergency fund first?

You don’t necessarily have to choose one exclusively. Having a small emergency buffer can help you deal with unexpected expenses without taking on additional debt. From there, you can decide how to divide your available money between growing your emergency fund and paying down debt based on the cost and urgency of your debts.

What should I use my emergency fund for?

Your emergency fund is for necessary expenses you couldn’t reasonably plan for, such as an unexpected loss of income, urgent repairs, essential travel, or another unforeseen cost. Planned expenses, holidays, shopping, and non-essential purchases are better kept separate so your emergency money remains available when you really need it.

I used to live in Spain while getting paid in dollars, which meant my income was in USD but most of my expenses were in euros. Whenever I wanted to save part of what I earned, I had to decide if it made more sense to keep the money in dollars or convert it to euros.

If you earn internationally, you may have asked yourself the same question. And the answer depends less on which currency is “better” and more on what you’re saving for.

There isn’t one currency that always makes the most sense. It depends on where your money comes from and, just as importantly, where it will eventually go.

A simple rule is to save in the currency you earn or plan to spend. If you’re paid in dollars and your goal is in dollars, keeping that money in USD avoids converting it twice. If you know you’ll eventually spend in another currency, you can plan your savings around that instead.

Let’s look at when saving in USD, GBP or EUR makes sense and how to choose the right currency for different goals.

Does the currency you save in matter?

Yes, especially when your income and expenses involve more than one currency.

Imagine you’re paid $2,000 each month and want to set $300 aside. You could immediately convert that $300 into your local currency, but what happens if you’re saving for something you’ll eventually pay for in dollars?

When the time comes, you may need to convert the money back to USD. That means going through two currency conversions when you could have simply kept part of your original payment in dollars.

Every currency conversion comes with an exchange rate, and providers may include a margin or charge a conversion fee. Exchange rates also change over time, so the amount you get when converting today may be different from what you would get a few months from now.

This is where thinking about the purpose of your savings becomes useful.

Rather than asking which currency is the “best” to save in, ask yourself two questions: What currency do I earn in, and what currency will I need when I spend this money?

The answers can help you decide where to keep it.

When it makes sense to save in dollars, pounds or euros

USD, GBP and EUR are widely used currencies, but that doesn’t mean you need to pick one and keep all your savings there.

The right choice depends on your income, expenses and plans.

Saving in USD

Keeping savings in dollars can make sense if most of your income already arrives in USD.

If part of that money is intended for future expenses in USD, keeping it in dollars means you don’t need to convert it until there’s a reason to.

USD may also make sense for a general buffer if dollars are a regular part of your financial life. The important part is that the currency matches how you expect to use the money.

Saving in GBP

GBP can be a practical choice if you earn or regularly spend in pounds.

Perhaps you work with UK clients and receive part of your income in GBP. Or maybe you’re saving for tuition, rent, a move to the UK or another expense that you know will be charged in pounds.

Keeping that money in GBP means you already have the currency you’ll eventually need.

If you earn in another currency, however, moving everything into pounds just because you think GBP might become stronger introduces another variable. Exchange rates can move in either direction, so your decision is better based on a real future need than trying to predict the market.

Saving in EUR

The same logic applies to euros.

If you receive EUR from clients or employers, you may want to keep part of those earnings in euros rather than immediately converting the full payment.

EUR can also be useful when you have a specific euro-denominated goal. You might be planning a trip around Europe, saving for a move, paying for a course or preparing for another expense that will eventually come out of your pocket in euros.

In that case, gradually setting aside EUR can help you build towards the amount you know you’ll need.

Here’s a simple way to think about it:

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You don’t necessarily have to make the same choice for every goal. Your emergency money, next holiday and future move can each have different timelines and currency needs.

The real cost of converting too early

It’s tempting to convert foreign income as soon as you receive it, especially if that’s what you’ve always done. But converting before you know what the money is for can sometimes mean paying for an extra conversion later.

Say you receive $1,000 and want to save $200 for something priced in USD. If you keep that $200 in dollars, it’s ready when you need it. But if you convert everything to your local currency, you’ll eventually have to convert part of it back to USD.

That extra conversion can come with fees, and exchange rates may change in the meantime.

Of course, converting the money you need for rent, groceries and other local expenses makes sense. For the rest, think about what you’re saving for before deciding which currency to keep it in.

How to match your savings currency to your goals

Once you start thinking about savings as individual goals rather than one big pot of money, choosing a currency becomes easier.

Say you have three plans: an emergency fund, a trip to Spain and money for an upcoming move to London.

Each one serves a different purpose.

Your emergency fund might stay in the currency you earn or use most often. For your Spain trip, you could gradually set aside EUR because that’s what you’ll spend when you get there. And your moving fund could be kept in GBP because you already know you’ll need pounds for deposits, rent and other expenses.

Instead of trying to decide if USD, GBP or EUR is universally “better”, you’ve matched each currency to a real goal.

You can apply the same approach to smaller plans, like a new laptop priced in USD, a course charged in GBP or a holiday budget in EUR.

If you earn internationally, opening a multi-currency account can make this easier because you don’t have to move everything into one currency as soon as you get paid.

And you can take the idea a step further by separating the money for each goal.

Save in USD, GBP and EUR with Pouch

With Pouch, you can create individual Pouches in USD, GBP and EUR and give each one its own purpose. You might have an Emergency Pouch in USD, a London Pouch in GBP and a Summer Trip Pouch in EUR.

You can also set a target for each Pouch, making it easier to see how close you are to your goal without mixing that money with your everyday balance.

If your first priority is having money available for unexpected expenses, you can also start by learning how to build an emergency fund.

There’s also Round-ups if you want to build towards a goal little by little. When you enable Round-ups, eligible Grey card payments are rounded up and the difference is moved into the Pouch you choose.

Pouch doesn’t pay interest, and the money you put there isn’t invested. It simply gives your savings and plans their own space within Grey, separate from the money sitting in your everyday balance.

If you already receive your income through Grey, you can save in the currency you earn and start building towards your next goal without converting the money first.

The goal is to give the money you’re setting aside a currency that makes sense for how you plan to use it.

Frequently asked questions about saving in dollars, pounds or euros

Is it better to save in dollars or euros?

Neither currency is automatically better for saving. A useful approach is to consider the currency you earn and the currency you expect to spend.

If you earn in USD and are saving for an expense priced in dollars, keeping the money in USD can avoid an unnecessary conversion. If your goal is priced in EUR, saving that portion in euros may make more sense.

Should I save in the same currency I get paid in?

It can make sense, particularly if you expect to use the money in that currency later. Keeping part of your income in its original currency also means you don’t have to convert all of it as soon as you’re paid.

For goals in another currency, you may prefer to set money aside in the currency you expect to spend.

Is it good to keep savings in different currencies?

It can be useful when you earn or spend in multiple currencies. For example, someone earning USD but planning to move to the UK may keep part of their savings in USD and set aside a separate GBP fund for moving expenses.

The decision should reflect your actual plans rather than trying to predict which currency will increase in value.

When should I convert my foreign currency income?

Consider converting the portion you know you’ll need in another currency.

If you’re paid in USD but need local currency for your monthly expenses, converting enough to cover those expenses makes sense. Money intended for a future USD expense may not need to be converted at all.

Can I save in USD, GBP and EUR at the same time?

Yes. With a multi-currency account that supports these currencies, you can keep money in USD, GBP and EUR at the same time.

Grey Pouch also lets you create separate Pouches in each supported currency, so different goals can have their own currency and target.

What is multi-currency saving?

Multi-currency saving means keeping money for different goals in more than one currency rather than converting everything into a single currency.

For example, you might keep an emergency fund in USD, save for UK expenses in GBP and set aside EUR for a European trip. The currencies you choose depend on how you earn and what you’re saving for.

Does Pouch pay interest?

No. Pouch is not an investment or interest-bearing savings product. It is a way to separate money from your main Grey balance and organise it around specific goals in USD, GBP or EUR.

Give each goal its own currency

There’s no need to choose one currency for every part of your savings.

Start with what the money is for. If the goal is to be paid for in dollars, saving in USD may make sense. If you know you’ll need pounds or euros, you can build towards the goal in that currency instead.

With Grey Pouch, you can separate those plans, set targets and keep your USD, GBP and EUR savings organised in one place.

Open a Pouch in the currency you earn and fund it today.

Opening a US bank account from outside the US can be difficult, especially when the usual requirements are difficult to meet. A non-resident may not have a Social Security number, a US credit history or an established relationship with an American bank, yet still need a US account for work, travel, business or managing money in dollars.

Bank of America is one of the US banks that offers a potential route for non-residents through its Advantage Banking accounts. Unlike some banks that make an SSN or ITIN central to the application, Bank of America may accept other forms of identification from eligible applicants. However, that does not mean the process can be completed entirely from overseas.

A US address and an in-person branch visit can still be part of the process, making the practical requirements just as important as the documents themselves. This guide explains what non-residents should know before applying, including eligibility, identification, address requirements and what to expect at the branch.

Also read: Open a US bank account without an SSN

Can a non-resident open a Bank of America account?

A non-resident may be able to open a Bank of America account, making it one of the more structured options among major US banks for people who live outside the country. However, “possible” does not mean completely remote or guaranteed. Eligibility depends on the applicant’s circumstances and the bank’s requirements.

For non-residents, the process can involve:

• Visiting a Bank of America branch in person.
• Providing a US residential address.
• Presenting acceptable identification, which may include a passport and another form of ID.
• Meeting the bank’s account-opening requirements for the specific account.

One useful distinction is that an SSN or ITIN may not always be required for eligible non-resident applicants, depending on the circumstances. That can make Bank of America more accessible than banks where a US tax identification number is a central requirement.

The Bank of America offers a more clearly defined path for some non-residents, but it still involves practical hurdles, particularly the US address and potential branch visit. Anyone applying should confirm the current requirements with the branch before travelling.

Also read: How non-US citizens can open a US bank account online

What you need to open a Bank of America account as a non-resident

Bank of America’s Advantage Banking range provides a possible route for eligible non-residents, including some applicants who do not have a US Social Security number. The exact requirements can depend on your circumstances and the account you are applying for, so checking with the branch before travelling is important.

An advantage banking account

The process centres on eligible Advantage Banking accounts rather than a special non-resident account. The bank can assess your application based on your individual circumstances and the documents you provide.

Two forms of identification

Applicants should generally be prepared to provide two forms of ID. A valid passport can serve as primary identification, while the second document depends on what the bank accepts.

A US address

A US residential address is generally part of the application. This can be one of the biggest practical hurdles for someone who lives permanently outside the country.

What about an SSN or ITIN?

An SSN or ITIN may not always be required for eligible non-resident applicants. However, not needing one does not remove the other account-opening requirements. The bank may request additional information depending on your circumstances.

You may also like: How to open virtual bank accounts for freelancers outside the USA

How to apply for a Bank of America account as a non-resident

The process is fairly straightforward on paper, but the branch visit is the part international applicants need to plan around. These four steps give you a clearer idea of what happens from application to approval.

1. Check your eligibility

Before making travel plans, confirm that your circumstances and chosen Advantage Banking account meet Bank of America’s requirements. This can help avoid arriving at a branch only to discover that your application cannot be processed.

2. Prepare your documents

Have the identification, US address information and any other details the bank requests ready. If you are applying without an SSN or ITIN, confirm what the branch will accept before your visit.

3. Visit a branch

Non-residents will generally need to complete the account-opening process at a Bank of America branch in the US. A banker can review your information, verify your identity and process the application.

4. Wait for the account to be opened

If everything is in order, the account may be opened during or shortly after the appointment. Timelines can vary depending on verification and the circumstances of the application, so do not assume approval is guaranteed on the day.

Also read: How to open a USD bank account remotely without US citizenship

Where Bank of America can still be difficult for non-residents

Bank of America may offer a clearer route for some non-residents, but that does not make opening an account from abroad completely straightforward. The biggest issue is still the US address requirement. Someone who lives permanently outside the country may find it difficult to provide the type of residential address the bank expects.

The in-branch requirement can be another hurdle. Instead of completing everything from home, applicants may need to visit a physical Bank of America branch in the United States. For someone based in Africa, Europe or Asia, that can turn what looks like a simple banking application into a trip that requires time, planning and additional expense.

There is also no guarantee that meeting the basic requirements will result in approval. Individual applications can be assessed differently, and a branch may request additional information before opening the account. So while Bank of America can be a more structured option for non-residents, it may not suit someone who needs US banking access entirely online and without a US address.

A US banking option without a US address

A US address can be one of the biggest barriers when trying to access US banking from abroad. For businesses and individuals who mainly need to receive USD payments, opening a traditional US bank account may feel like more work than necessary. An online account with US payment details can offer a simpler alternative.

Grey provides users with a USD account through its partner bank, Lead Bank, including US ACH routing and account details. The account can be opened online, so there is no need to travel to a US branch or provide a US residential address simply to access these USD payment details. This can make receiving eligible payments from US clients or businesses more straightforward.

The account also supports multiple currencies, allowing users to manage funds beyond USD. For everyday spending, Grey’s virtual card provides another layer of flexibility, allowing users to shop online and wherever Visa is accepted. Together, the account and card provide a practical way to receive, hold and spend internationally without setting up a traditional US bank account.

Frequently asked questions

Can a non-resident open a Bank of America account?

Yes, eligible non-residents may be able to open a Bank of America account. The bank provides a more structured route through its Advantage Banking accounts, although requirements still apply. Applicants should expect that an in-person branch visit may be necessary, and approval is not automatic.

Can I open one without an SSN?

In some cases, yes. An SSN or ITIN may not always be required for eligible non-resident applicants, depending on their circumstances and the account involved. However, avoiding the SSN requirement does not remove other requirements, such as acceptable identification and a US residential address.

Do I need a US address?

Generally, yes. A US residential address remains an important part of the application for non-residents, even where an SSN or ITIN is not required. This can make Bank of America difficult for people who live permanently outside the US and do not maintain a US residential address.

Can I open it online from abroad?

Generally, no. Non-residents should expect to complete the account-opening process at a physical Bank of America branch in the United States. The online application process does not provide a dependable way for someone living abroad to open the account entirely remotely.

Discipline, or in this case, the lack of it, is perhaps the biggest culprit when the topic of saving’s difficulties comes up. Everyone points to it. “If you were more disciplined, you’d have more savings.

Discipline is hard, which is why I usually suggest creating systems to assist you.

For example, when your emergency fund, holiday savings, laptop replacement fund, and next rent payment are all in the same account, every spending decision becomes guesswork. After you check your balance and it looks fine, you just spend. Two months later, you realise the holiday fund has been funding groceries and you’re nowhere near where you need to be.

The problem is the system. Specifically, the absence of one. This article covers how to set financial goals that are specific enough to actually work, how to prioritise when you have several competing at once, and how to structure your savings so every goal has its own lane and its own visible progress.

What are financial goals?

A financial goal is a specific outcome you’re saving toward, with a target amount and a timeline. It is not a vague intention like “save more” or “spend less.” Those are closer to wishes than actual goals. A financial goal sounds like: “Save £1,500 for a trip to Morocco by March,” or “Build a three-month emergency fund of $6,000 by December.”

Being specific is what makes it work. A vague intention gives you nothing to measure and no way to know if you’re behind. A specific goal tells you exactly what to save per month to hit the target, and makes it immediately obvious when you’ve drifted off course.

Financial goals are usually grouped by time horizon.

Short-term goals
These are goals with timelines of up to one year. Perfect examples are a holiday fund, a new laptop, covering an upcoming car service, and building a starter emergency fund. They usually require the most active saving because the deadline is relatively close.

Medium-term goals
These are usually in the one-to-five-year range, for example, a deposit for a flat, a car purchase, a wedding, or a career break fund. These have more time to build but need consistent contributions to stay on track.

Long-term goals
These generally extend beyond five years. Retirement savings, building a property deposit for a major purchase, and funding a child’s education. These are the goals most easily deprioritised because the deadline feels distant, but they’re often the ones that matter most.

Most people are working toward two or three goals from each category simultaneously. That’s not a problem. The problem is trying to manage all of them from the same unmarked pot.

Why does one balance fail when you have several goals?

When all your savings are in a single account, a few predictable things happen.

You lose track of what each pound or dollar is for. The balance looks healthy in aggregate, but you have no idea how much of it belongs to the holiday fund, how much is the emergency fund, and how much is genuinely spare. So you make spending decisions based on the total, which is almost always misleading.

Progress becomes invisible. If you’re trying to save £1,500 for a trip and the money is mixed in with everything else, you can’t see how far you’ve come. The psychological pull of visible progress, watching a number move toward a target, is a real factor in whether people stay consistent.

Goals cannibalise each other. When a short-term need comes up, and the money is all in one place, the easiest thing to do is spend from the pool without realising you’ve just set the holiday back by two months.

This is why separating your money by purpose works. It’s about giving every goal its own space so you can see each one clearly. For more on this, see our piece on why separating your money helps.

How to set and prioritise your savings goals

Start by listing everything you’re saving for, or know you should be saving for, without filtering. Write down every goal, big and small, near and distant.

Once you have the list, add two things to each goal: a target amount and a date.

If the target or the date seems uncertain, make your best estimate and treat it as a working figure. A goal with a rough timeline is more actionable than a goal with no timeline at all. You can revise it later.

Now rank them. There are two useful criteria for prioritisation.

Urgency: How close is the deadline? A goal with a six-month deadline outranks one with a three-year deadline, even if the three-year goal feels more important in the abstract. Near-term goals need more active attention because there’s less time to recover from slow months.

Consequence of missing it: What happens if you underfund this goal? Missing a holiday fund target is recoverable. Missing an emergency fund means you go into debt when something unexpected happens. Missing a rent deposit deadline means you lose the apartment. Try to rank goals with high-consequence outcomes higher, regardless of how appealing they are compared to other goals.

After ranking, you have a practical order of priority. The top two or three goals get the most attention in your monthly allocation. The rest get smaller but consistent contributions, so they’re moving forward rather than stalled.

Review the list and rankings every three to four months because goals change, deadlines shift, and priorities evolve. A quarterly check keeps the system accurate without making it a constant source of admin.

How much to put towards each goal

Once you know your goals and their order of priority, the allocation question is mechanical.

Start with your monthly saving capacity: the amount left after essential expenses that you’re willing to direct toward goals. If this number seems uncertain, work backwards from your income and fixed costs to get a realistic figure rather than an optimistic one.

Then allocate across goals by priority. A simple approach is to give the highest-priority goal the largest share, and work down from there. A useful starting split for someone with three active goals:

• Goal one (highest priority): 50% of monthly savings
• Goal two: 30%
• Goal three: 20%

Adjust the percentages to reflect your specific timeline maths. If goal two has a close deadline and goal one is longer-term, you might temporarily flip the allocation until goal two is funded.

For each goal, run the basic savings goal calculator check: target amount minus what you’ve already saved, divided by the number of months remaining. This gives your required monthly contribution. If your current allocation to that goal doesn’t meet the required contribution, something has to give. Either the timeline extends, the target reduces, or the allocation increases at the expense of another goal.

How to track multiple goals with a Pouch for each

Once you have a priority order and an allocation, the practical question is how to keep everything visible and separated without managing multiple bank accounts or a complex spreadsheet.

You can set aside money for each goal in your Grey account. Each Pouch has a name and a running balance, so you can contribute to each one individually, without the amounts bleeding into one another or your spending balance.

Here’s how that looks for a real example.

Sade is saving for three goals simultaneously: a six-month emergency fund, a trip to Japan, and a new laptop.

Sade has £650 per month set aside. She has three Pouches in her Grey account, each named, each with a target set. On payday each month, she transfers £300 to Japan 2027, £200 to the Emergency fund, and £150 to the Laptop fund. Each balance moves toward its target independently.

The laptop fund hits its target in six months. Amara closes that Pouch and redirects the £150 per month to her emergency fund, accelerating it.

The practical value is clarity. If one is falling behind, it’s immediately obvious. If a goal is reached, the allocation redistributes. Nothing gets lost in a single undifferentiated balance.

To compare savings-goal apps and see how different tools handle multiple goals, this guide covers the main options side by side.

Remember to create a Pouch for each goal and fund it when due.

Frequently asked questions

How do I save for more than one goal at once?

List every goal you’re working toward, assign each one a target amount and a timeline, then rank them by urgency and consequence. Allocate your monthly savings across them in order of priority, with the most urgent goals receiving the largest share. Keep each goal in its own named savings space so you can see progress on each one individually. Review the allocation every three to four months and adjust if any goal is falling behind or has been completed.

How do I decide which goal to prioritise?

Two criteria are most useful: how close the deadline is, and what happens if you miss it. A goal with a deadline in six months and a high consequence if unfunded (an emergency fund, a rental deposit, a time-sensitive purchase) ranks above a goal with a three-year timeline and a recoverable consequence. Once you’ve ranked by urgency and consequence, give the highest-ranked goals the largest share of your monthly saving capacity and work down from there.

How much should I put towards each goal?

For each goal, calculate your required monthly contribution: target amount minus what you’ve already saved, divided by months remaining. Compare that figure to your current allocation for that goal. If your allocation doesn’t meet the required contribution, you have three options: extend the timeline, reduce the target, or increase the allocation by reducing another goal’s share. A simple starting split for three concurrent goals is 50%, 30%, and 20% of total monthly savings, adjusted to reflect which goals have the tightest deadlines.

How many savings goals is too many?

There’s no fixed limit, but more than five or six active goals typically means contributions are spread too thin to make meaningful progress on any of them. If your monthly saving capacity is £400 and you have ten goals, the average contribution per goal is £40, which may not be enough to reach most targets in any reasonable timeframe. A more practical approach is to focus on the top three to four goals actively, with smaller holding contributions to longer-term goals, and add new goals to the active list when existing ones are funded.

How do I track multiple goals without a spreadsheet?

Named savings balances, one per goal, each with a target amount set, handle the tracking automatically. Grey’s Pouches give each goal its own named space within your account with a visible balance. When a contribution is made to a specific Pouch, the balance updates immediately.