How Much Money You Should Save

So many of us are wondering about this important financial questions of how much money we should be saving. It’s an important question to have the answer to, but the answer is not so simple. When it comes to how much money you should save, each person’s circumstances, goals and worldviews are different, which makes it difficult to give a one size fits all answer. Many suggest saving 10 % of your monthly income, but for some that will prove to be too difficult and for others, they have the ability to stock away a little bit more. There are a few guidelines that can help us to put things into perspective and decide what a good savings rate would be for ourselves despite what Mr Jones down the road is saving.

savings

The first thought to ponder on, is what are you saving for? There are so many different reasons to be saving money. You may be interested in a short term saving, to be able to afford your annual vacation. The amount you should be saving for this can be worked out quite easily, based on the cost of the vacation and how long you have to go before you’re required to make the bookings.

Perhaps you’re thinking bigger than just your annual vacation and you want to have some sort of nest egg for the unexpected emergencies, or a “rainy day? fund. On top of all this you may be thinking about saving for your retirement too, which when it boils down to how much you should be saving, has a lot of other factors that come into play.

So once you know what you want to save for, it puts your monthly savings into perspective. Now, you don’t only have to be saving for one certain thing. You could have a short term savings, a savings cushion and be saving toward your retirement all at the same time, and that is probably the best thing that we should all be doing! Covering ourselves and providing our families with financial security the whole way.

The second thing that impacts on the amount that we should be saving each month, centers on the stage of life that we are in. If you are in your 20’s, saving for your golden years, then you have room to play with and you won’t need to be putting away huge amounts of cash each month. As the years go on, and the closer you get to retirement age, you can increase your monthly contributions. But if you started focusing on your retirement later on in life, and it’s around the corner from your, then if you can manage it, your monthly savings should be as high as you can manage, in order for you to be able to maintain the standard of living that you’re used to, when you’re no longer earning.

Be smart about your savings, and whatever you decide, make sure that you are putting something away each month without exception!

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10 Ways to Save Money

Securing your financial future starts with saving. Whether your goals are to meet your family’s needs, save for a better retirement, or buy a bigger house or faster car, saving is the most important way to ensure your meet your personal finance goals. And contrary to popular belief, it doesn’t have to be hard. According to Money & Career Cheat Sheet, as long as you are making some money, you should be saving some.

Check out these 10 simple ways to save money:

1. Record your expenses

The very first step to saving is knowing how much you spend. For a whole month, keep track of every transaction you make. This means trying to record everything you buy, from a newspaper to a cup of coffee. After gathering the information, make groups of different categories, such as your mortgage, services like gas and electricity, groceries, and so on.

2. Manage your debt

Before setting your budget, it’s important to determine how much debt you have and begin repaying it before you can start saving. Once you are finished paying back the loan, you could continue to put the same amount of money aside for your savings fund.

Save Money

3. Create a budget

Now that you’re clear on how much you spend monthly, build a budget to plan and help control your spending. In the budget ensure that you put some money away for emergencies, and remember to include a place for expenses that don’t occur monthly, such as car services, or home reparations.

4. Plan on saving money

Try to allocate at least 10% of your net income towards saving. If you find that with your current budget this is not possible, then you should probably cut back on more expenses if possible.

5. Set saving goals

To make it easier to start, set for yourself some achievable saving goals – both long term and short term. For the short terms goals, you could put money away to buy a new computer, bike, or car, and for your long term goals, maybe plan for your kid’s college education, retirement, or a remodeling of the house. Take time to think about what’s most important to you and what you want your money to achieve and make your goals real by writing them down.

6. Use price comparison tools

Price comparison tools are available online and will let you if there are lower prices for the item you intend to purchase available elsewhere. Sites such as Price Grabber and Shopzilla can help you save tons of dollars on many items.

7. Decide on the priorities

Different people have different priorities when it comes to saving, so you need to determine which goals are the most important to you and save accordingly.

8. Different investment and saving strategies

For your short term goals you probably want to use a regular savings account, but for your long term goals you could consider other options, such as mutual funds and stocks. Although it’s best to speak to a financial advisor before making any decisions.

9. Automatic transfers and direct debits

Automatically transferring money from your main account to your savings account makes it less likely for you to spend money, because you will never see it in your account and will make it easier to achieve your saving goals.

10. Watch the savings grow

Make a point of checking on your progress monthly. This will not only help you to stick to your saving plan but also identify loopholes in the plan and allow you to make adjustments accordingly.

About the author: Michael Peggs is the founder of Marccx Media, a digital marketing agency specializing in SEO and Content Marketing. Before Marcxx, Peggs worked at Google in business development, forming digital media and advertising partnerships. He is also a blogger and podcaster, hosting the iTunes Top 10 New & Noteworthy podcast You University – The Personal Branding Podcast.

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