How Much Money Should I Save Each Month?
The question is: what will you do with the savings? If you are not motivated by an inspiring goal, you will not save much. It is crucial to understand that $100 is not savings, but your excuse and a kind of permission to spend. We are talking, of course, about more adequate amounts. Here are some basic guidelines to help you figure out how much to save each month.
● Revise Your Lifestyle
A common way to tell if you are saving enough money is to check if you are saving right up enough or if there is still some spare money left. If your belts seem to be tightened, then you are probably saving a decent amount. You may want to loosen up your belts, but keep yourself strict so that you can keep a close eye on your spending each month. This doesn’t mean you have to give up entertainment or Forex trading, just that you need a savings plan that limits that spending so you don’t sacrifice your happy future. The sooner you can develop good financial habits, the better. Strategies can be devised to help you save money at an early age. Bring it to automatism. You will get used to saving money without even thinking about it.
● There Must Be a Purpose
Once you start saving money, you must decide what you are doing it for. For instance, you should have three to six months’ living expenses set aside in a reserve fund. You can then set aside a portion for retirement. After that, you might consider putting money aside for that holiday or new housing in Nigeria, or simply to increase your wealth and an impressive bank account that is nice to look at. If you know what you are saving for, it will be easier for you to make the necessary sacrifices to achieve results.
● 10% Rule
The standard set by many experts of Forextime is to save at least 10% of your income. This is a good starting point and easy to manage because it is a fixed amount of money. It may be hard to stick to it, but many people can manage it and increase the amount over time. After all, you can save 20% or even 30% to increase your savings and plan for your future. In addition to saving for retirement, you must save more than the money you put into your retirement savings account. Usually, the employer does this for you. Also, if you want to retire earlier, you need to have savings to live on separately, regardless of the amount of your pension payment. So, find more info about additional sources of income.
● Increase the Amount You Save
Over time, you can review the amount you save each month. It makes sense to start saving more than 20% every month. If you earn significantly more than you need to live, then it makes sense to save as much as possible. One easy way to increase the amount is to save more whenever you get a bonus or any pay raise. It also includes additional sources of income.
● Let Your Savings Work for You
When you start looking for ways to save money, you will be surprised at the power they have. The sooner you start working on accumulating good savings, the sooner they will start working for you.
● What About the 50/30/20 Rule?
Many personal finance gurus describe the ideal distribution of income as a 50/30/20 ratio. You should be saving 20% of your income every month, while 50% goes for fixed monthly expenses like rent, utilities or transportation, 30% goes for variable expenses like food and entertainment. Some call it this: 50% for needs and 30% for wants.
But most importantly, if you want to follow this rule, you must try to reach the share of monthly deductions for savings — 20%. To do this, you can open separate accounts for short-term and long-term savings, with a variety of purposes, ranging from holidays to a replacement car and deductions for children’s education and your retirement.
Is it possible to save 50%?
Saving 50% of your family’s monthly income is a more achievable goal, especially if two people work. Many couples live on the same salary when one of them is working. Another easy way to save is to live on the same income as last year. It means you made it last time before you got that wage increase, didn’t you? You will also receive income in your savings and, as a result, you will get a significant increase in your funds.
