How Much of Your Wages Should You Be Putting Away In Savings?

People save money due to some reasons depending on your age and goals. How much money should you be putting away daily, weekly or monthly depending on when your income is available? Depending on different financial advisors, there are different ideas on ways to split this money. The most popular is the one of saving twenty percent of your total income, where fifteen percent goes towards your retirement while the rest five is directed to your emergency funds, long-term saving or reducing/clearing loans or debts. Putting money aside can save you a lot of setbacks.

Factoring in money to be put side depends on your financial goals that can be

Short-term

Short-term goals can be about saving for a vacation to the Bahamas, Hawaii or African Safari; it can be an investment saving project, buying home appliances, birthday celebration or ensuring that you have enough school fees money for the next semester.

For example, if you need to save $10, 000 in 10 months, you will need to be putting aside $1000 each month to reach that target.  This, therefore, does not impose a certain percentage but a certain amount per month.

Long term goals

These are goals that are to be achieved within a ten-year plan. This can be purchasing a new car, making home renovations, making a house down payment, or starting a business venture.

Exceedingly Long term goals

Long-term goals lie under goals that are to be achieved over ten years. This may purchase a mortgage for a new home/commercial home or building a trust fund/ a college fund for your children.  A retirement plan also falls under this category of importance. Since this is a long term thing, the money to be put aside is much less as compared to the short-term goals. Just as long as you meet the goals in the desired timeline.

Plan and estimate the cost

After putting down your goals by making a list, the next thing to do is to put down the price of each idea. This means that against every need that is listed down, you should indicate the amount of money that is going to be needed to achieve that dream. Do this for every single goal that you have on your list. Plan on how you are going to get that money from the income that you generate and give a deadline for that to be reached. After, divide the time needed by the amount of money required to get the amount of money you expect to put aside every month to attain your goals.

Repeat the process for each goal and total up the amount. What you realise is that the amount will exceed your total income. It does not mean that your dreams are exaggerated. Nevertheless, it says that you should look for ways to save more money. This happens to all of us, and that is why there are tips for weekly saving ideas that have been provided. This can be done by cutting your expenditure among other things to achieve your dreams.

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