Many people keep wondering how much money they should save each month. The simple answer is: as much as you can.
We all make a different amount each month. We also have various financial obligations. As such, it is vital to note that one dollar amount will not work for everyone.
In this article, we have put for you some guidelines to follow when determining how much to save every month.
Always Remember the 10 Percent Rule
The standard rule recommended is 10 percent of your income. This is a good beginning point. This makes saving easy since you will have set a specific amount aside to save every given month.
Whereas it’s quite easy to save this amount, you might have to consider increasing the amount with time. Eventually, you can work with 30 or even 40 percent to grow your savings and also implement your plans.
Increase the Amount You Save
It is not reasonable to begin at 20 percent and continue with that all the way. At some point in your saving life, you should increase the amount to 30 or 40 percent. If you are making more than you need to survive for a given month, consider saving a lot of money.
To make things easier, always save more as you get a pay raise. This way, you might not feel the pinch. Set challenges for yourself every month, track your expenses, and also always remember to give.
Re-Check Your Lifestyle
If you want to know you are saving enough, consider whether you are feeling the pinch. If you feel like your lifestyle has changed a little bit, then you are on the right track. This will put you in a place where you have to watch your spending habits. This does not mean that you will never have fun or enjoy your money; it means that you are saving enough so that you are not overspending every day.
Always Have a Purpose
Once you begin saving, you should have a purpose as to why you are saving. For instance, you set aside two to five months in an emergency fund. Set another percentage aside for retirement. Personal finance experts recommend 15 percent should be saved each month for retirement.
Save another percentage for a new home or vacation. In other words, if you know what you are saving for, it will be easy for you to make the sacrifices you need to achieve your goal.
Your Savings Should Work for You
As you begin the journey of saving, you will be amazed at how much power your money has. If you are disciplined enough to save every month, your money will also grow diligently. Set strategies to help you save every month, and it will be easier for you as you grow up.
It is always advisable to build healthy financial habits at an earlier stage in life. You can also set automatic money deductions so that whenever your pay-check comes in, a certain percentage is automatically transferred to your savings account.
Saving will save you a lot of financial issues in the future. It might look like you are depriving yourself of some things while saving, but this will be a blessing in disguise. It is all about building a saving habit, and the earlier you start, the better.