How Much Should You Be Saving Each Month?
This is something that varies from person to person due to the difference in wages, bills, and even lifestyles. Not everybody should be saving the same amount as everyone else as it just wouldn’t work and would lead to problems including debt. But, that doesn’t mean that there is not anything out where on the web to help you. For example, there are plenty of techniques, ratios, and guides for you to try and stick to. As follows is some information on how much you should be saving each month to allow you to build up a steady amount of savings to fall back on if necessary.
What should we save for?
There are plenty of things we should be saving for. Most things are probably things we don’t expect. Experts say that you should have 3 times your monthly income saved in case of an emergency. Most people are saving for an emergency, this could be anything from a broken-down car to a broken boiler, we just don’t know what’s around the corner. Therefore, it is always better to have some money which has been put to one side, just in case of that.
The 50/20/30 rule
This appears to be the most common rule which people use when saving. This is because it can be related to most people’s incomes and it works well as it still leaves us with money to be spending on essentials and even things we want during the month. The rule splits your income into three sections, 50% on essentials for example bills and food. 30% on goods which you want, this might be a trip out. Then the remaining 20% is to be saved. This way you can easily save money and still spend what you like.
Although, this method might not work for everyone as it may be too much or too little. Realistically, it is best to save as much as you can afford. Those with larger incomes may want to save a little bit more instead of spending their money on either essentials or things they want. Similarly to those who think saving 20% is too much.
Before making any financial decisions you need to ensure that you are making the right choice for you. In other words, you need to make sure that you can afford to save what you want to save and that it isn’t too much or too little. If you are looking for any other saving techniques to help you begin your savings journey, click here.