In general, the general advice is to save 20 percent of one’s income each month.
Try the 50/30/20 rule devised by Senator Elizabeth Warren, a university teacher of bankruptcy law:
- 50% of the monthly budget for essential expenses such as rent and food
- 30% for discretionary spending and entertainment
- 20% for savings
This recommendation to save every 20 percent of one’s income makes sense. But it is not always so simple to apply in everyday life.
The good news is that those who save 20% of their earnings will, in about 40 years set aside 25 times their annual income.
Basically, after 40 years of saving you can stop working for 25 years. All without giving up your usual lifestyle. Yes, it is a simplification, but it gives enough of an idea.
On the other hand, if setting aside 20 percent of your income doesn’t seem like a feasible goal at the moment, don’t get frustrated.
Saving is first of all a habit.
Source: financer.com
Find out who we are
We deal with over-indebtedness prevention related to usury risk every day throughlistening, counseling and support. We are approached by employees and retirees who are in a situation of imbalance between income and expenses and cannot pay their debts.
In the video we show you the steps to follow to receive free support.
If you find yourself in a similar situation, please contact us!
Learn about other financial best practices
Good financial advice #06 Dedicate 30% of income for personal expenses
Plenty of people suggest using no more than 30 percent of monthly earnings for personal expenses, i.e., travel, dinners out, birthday gifts or subscriptions to gyms, newspapers and more.
Good financial advice #05 Devote 20% of income in savings
A good way to save is to follow the 50-30-20 rule that suggests using 50 percent of income for necessary expenses, 30 percent for personal expenses, and 20 percent for savings.
Good financial advice #04 Spend one minute of money a day
To be always sure of one’s financial and, therefore, economic situation, one only needs to devote 60 seconds each day to money management. How? Checking on investment trends, news, and important news.
Follow us on our social media
