Saving is a complicated goal that many place in their New Year’s resolutions. Having a good savings rate can allow us to live more calmly, and more so if we have a savings rate that can get us out of trouble.
But how much should we save? A percentage of salary? Which? Here are some methods to calculate how much we should save
1. The 20% rule
In personal finances, a pattern has spread that says it is advisable to save 20% of income. That is, from our salary or income.
It comes from the popular 50/30/20 rule, which says you should set aside 50% of your budget for essentials like rent or mortgage and paying for food and supplies, 30% for discretionary spending on leisure, clothing and non-essential or ongoing items and at least 20% earmarked for savings.
Everyone can agree with the recommendation to save 20% of monthly income, but it is not always that simple. Everything logically depends on our income and our level of spending or debts that we have to correct.
It is logical. If, for example, you have a high income, you should keep your expenses low and save a much higher percentage.
On the other hand, if saving 20% is impossible for someone right now, you shouldn’t follow that pattern either.
2. Instead of a percentage, save with a goal
If percentages don’t work for you, another option is to save with a purpose. Whether it’s for a new phone, a trip, a car, all at once, or to create an emergency fund that gives us security.
If you just can’t save, it’s important to start small. Let’s start with 1%. If, for example, we have a salary of 1,000 euros, let’s save 10 euros a month. It’s not much, agree, but try to grow that percentage little by little.
3. And what to do when you can barely save?
Some rules, effective to get used to saving progressively. His promise and objective is clear: at the end of the year, we will have an extra 1,378 euros for emergencies or to reach an extra expense.
With the 52-week money challenge, we must deposit an increasing amount of money each week for an entire year.
In its simplest and most affordable version, it means forcing us to save one euro the first week, 2 the second week, 3 the third week, and so on until we save 52 in week 52. You can save more each week if you have capacity, but the challenge is to gradually increase.
If we continue this challenge throughout the year, at the end we will have 1,378 euros.
4. Program an automatic fixed amount
Finally, for those who do or do tend to spend it all, one recommendation is to schedule an automatic transfer to a savings account at the beginning of the month for the amount we can afford, and check from time to time if we can raise it.
With this, especially if it is an account that is not in our sight on a daily basis, we will pay our savings first as if it were an invoice, and we will not pull it.
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