The vast new majority of people don’t save money every month, and the vast majority of them say they don’t because they can’t afford it.
However, the truth is that this is almost always an excuse, and we all can reorganize and restructure our finances so that saving is a priority.
And this is where it helps a bit to be clear about how much money we should save every month.
When a person considers improving their finances, perhaps one of the first things they have to start is saving money.
In other words, it’s easy to wonder how someone’s finances are just by looking at how much money they have saved.
And if you have nothing, when do you plan to start?
The 50/30/20 rule tells us that we should leave at least 50% of our income for the minimum basic costs or expenses that we have every month, those of survival without which we indeed could not survive.
30% for a little more optional expenses and perhaps something of tastes we give ourselves every month.
And 20% savings, including all types of protection, short, medium, and long-term.
Now, if you make very little money, 20% is probably too much in proportion to what you need to cover your costs and expenses.
Likewise, if you earn $ 10,000 a month, you can’t tell me that you are only saving $ 2,000 a month …
… because the safest thing is that your costs and essential expenses, and probably your tastes, do not exceed $ 3,000, $ 4,000, maximum 5,000 dollars, with which you could save even 50% or more of your income.
For this reason, when a person considers saving a portion of their money, they probably have to analyze what their amount of expenses is that they are distributing, how they are managing their money, how they are doing every month if they have opportunities to reduce certain costs or fees, or even eliminate them if they are unnecessary.
We have to restructure our finances to have a little more space to prioritize saving because saving only happens if it is a priority.
Before defining a suitable figure for you, you should think about the goal of saving.
Many people do not save, not because they cannot afford it (this is a way of justifying the fact that they do not know how to manage it, they do not know what they are spending it on, and they have not organized their budgets), but because they do not know what to do with the money they save.
It is likely that if they already had some money saved, they would spend it immediately and need more planning control over how to manage their finances.
It is ubiquitous to see people who hardly have the opportunity to do a job, generate additional income, withdraw their unemployment, or anything else, immediately seek to spend it on anything they were not really even thinking of spending.
Therefore, I should have several priorities when it comes to saving.
Usually, the savings should be multi-faceted and should have multiple simultaneous savings.
Types of savings that we can have as a goal
A savings for my goals or short-term objectives
Another for my long term goals or objectives
Saving the emergency fund (for all kinds of contingencies, where you have several months of essential expenses covered in case anything happens)
A savings fund for opportunities (to serve as capital for any business opportunity that arises and must be seized on time).
Long-term Financial Freedom Fund or “Pension” / »Retirement” (but on my part, not necessarily the mandatory pension but my own money in investment or savings with high returns for that stage of life)
These would be my most recommended types of savings to have clear objectives, and like these, there may be others adapted for each of us.
Knowing what they are, we will have to distribute the amount of money allocated in 3 or 4 different types of savings.
If for now you cannot save 20% of your income, but for example, 10%, you could put 2% for one fund, 3% for the other, 5% for the other, something like that.
It would be best if you started organizing in some way or way, according to your priorities or intentions.
Suppose you earn $ 1,000 a month and you are going to save 10%, which is $ 100.
You could distribute 50% of those 100 dollars towards an emergency fund until you complete it, then 30% of those 100 dollars (that is, 30 dollars) for a saving of short-term goals, and 20% for something else.
As you complete your emergency fund, you can give way to the opportunity fund.
Once those two are complete, you can open more capacity to save for Financial Freedom, or Investment, or Growth, even for a house that is a long-term goal.
And also, if at any time you can put more than that $ 100 into savings, you redistribute the additional money in this same way.
Either way, the minimum goal should be 20%.
In other words, your commitment should be to start now (in case you have not already done so) with saving any amount possible, always keeping in mind as a personal goal to save 20% of all money you receive.
That is, you receive an amount of money, you separate 20% and pretend that you received the rest and you do not have this percentage, you automate it, put it in an investment fund, or a high-yield savings account. You do whatever it takes, but you forget about that money and don’t touch it, according to your savings or long-term investment projection goals.
And if you have to start with 2% or 1%, it doesn’t matter, and you have to start saving whatever it takes.
Many people say,” but why am I going to save so little money each month if I am not going to achieve anything with that?” …
With that, you are going to achieve a lot. What you are going to achieve is to create and strengthen the habit of saving yourself, which will allow you to reach such incredible levels of self-control and sound financial management that you cannot truly imagine the potential. what’s wrong with it.
Just as it is going to serve you that having the minimum goal of 20% of income, if for now, it is not possible to achieve that percentage, then you can start to think if you can create an additional source of money or develop new skills, or try different things. , etc … But move to achieve your savings goal.
And eventually, if your income is enough, save more than 20% :
40%, 50%, 60%, 70% is not something crazy or as crazy as it seems since if you earn 2 or 3 times more than you need to cover your monthly costs, you can do it.
Just not being a victim of lifestyle inflation.
The essential new thing is a clear projection and the destination you want to reach or approach financially.
Not so much talking about a final destination, but about a path or a direction to go, and really when we talk about the issue of Financial Freedom, saving and investing is vital.