How Much Should You Save Every Month
When it comes to finances, you will have this question looming in your mind – how much should you save every month? Everyone wants to have financial security as it allows them to lead a comfortable life without any worries in the future. At the same time, you don’t want to work for the rest of your life, which places significant importance on saving money.
The real answer to this question is as much as you can; the more you save, the better it is for your future. However, the amount you make every month may not be consistent if you work in specific jobs. At the same time, the financial obligations you have every month will be different. For instance, you had to repair your vehicle, which took a huge chunk from your salary, as it was an unexpected expense.
Also, keep in mind that following specific rules won’t work for everyone, as your situation can be different. Here is a basic and simple guide which will help you understand how much you have to save every month:
What percentage should go into my savings?
What you need to understand is how and where the money flows from your pocket. For instance, 50% of your salary will go in the basics, such as food, rent, bills, and other various living expenses. Regardless of your financial situation, you will have to spend your money on them.
With the remaining percentage of your salary, 30% is for spending on what you want to get. For instance, you may want to pick up a new pair of shoes, as the old ones are worn out. Similarly, you may want to pick up clothes or other things, which are a necessity at the moment.
The last 20% of your salary should go into your savings. Now keep in mind that this value and the one for spending can vary according to your financial status. For example, if you are earning a lot of money, you can afford to decrease your expenses, while ramping up how much you save.
You have to understand that you may not always be in a position to save 20% of your salary. Sometimes, there are a lot of unexpected expenses, which forces you to spend a huge portion of your salary.
If you are a beginner in saving money, you should make it as easy as possible. The best way is to start saving 10% of what you earn, as it is a minor amount. Over time, you can increase how much you save to 20% - 30%. If you still find it challenging, automate the saving process, to ensure it is out of your reach.
How to save money
A great way to ensure you save adequate amounts of money every month is to use apps which help manage your expenses. There are apps which you can connect to your bank account, which will automate the entire process. You can also use manual entry apps to track your expenses. By taking a look at your expenses, you can determine where you spend the most and decrease them accordingly.
Another tip for cutting down your expenses is to make a list when you go shopping. As there are numerous items in the supermarket, it is quite easy to get carried away and splurge on products you don’t need. By making a list, you can identify which items are important, and avoid spending on unnecessary products. Similarly, if you have unused memberships or subscriptions, stop them immediately, as they are not useful.
Once saving becomes a part of your discipline, you are on the road to financial security!