Hello guys, today I am back with another article that is going to help you improve your lifestyle. Today we are going to be discussing the ideal amount of money one should save each month. If you are someone who is wandering around looking for financial advice, I would like to invite you to start from here. Let’s learn to save.
The 50/30/20 Rule
This is a popular rule most of you must have heard of. This famous rule suggests us to utilize the money we earn according to the following ratio.
- 50% – For Basic Needs (Food, Rent, etc)
- 30% – For whatever you want
- 20% – For Saving
So, according to this, if you earn 500 dollars per month, you should save 100 dollars. Well, if you are a high-earner, you can go ahead and save more than 20%.
If you don’t have a significant wage, it is ok to decrease the percentage you save. But should always remember to earn something every month. It doesn’t matter whether it is 500 dollars or 5 dollars. You need to, first of all, create this habit of saving. To do that, you have to save some amount of money each month.
We are not getting any younger
Most people realize that they should start saving way after their forties. I think that is quite late since we are getting closer to our retirement. We should start saving from the day we get a regular income.
If you are in your 20s or 30s, you will be able to save a significant amount of money if you follow the 50/30/20 rule. When you are retiring you will have enough money to spend your latter years without depending on anyone.
How long will I have to save?
This depends on the amount you earn each month and the percentage you are going to leave for savings.
For example, if you are earning 540 dollars per month, you will be able to save something around 13000 dollars.
Hungry for More?
For starters, watch this video from Nate about money-saving tips.
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