Setting aside 20%

For the last 2 post I have discuss with you about doing a daily savings. For this post I would share with you another saving tips. This time round the amount you will save will be bigger and we will be doing it on monthly basis. The tips is useful for everyone especially those who are in the working force regardless full time or part time. Students are strongly encourage to follow this tips when they going to start their career or part time jobs in the near future.

Every month when we receive our monthly paycheck from our employer, we tend to spend first then we save with the remaining amount. The worst part is we have nothing to save. The problem lies are we are not discipline and we didn't fix the amount to save on monthly basis.

To solve these problems we have to:

1. Discipline ourselves. Change our mindset from spending first and save later to save first and spend later.
2. Decide and fix the amount you want to save on monthly basis.

Now the question is how much are we going to save on monthly basis?

For a start, this is what I always recommend to all my clients to set aside 20% of their salary for their savings. Below is a simple calculations on how much you will save within 1 year.

Monthly salary = $2500

20% of salary = $500

Annual savings $500 x 12 months = $6000 per year.

You may be question yourself what if you can't set aside 20%? You can start maybe 10% or at the very least start with 5%. However as time goes by, you can increase by 5% or 10%.

The main thing you need to be aware is you must be consistent in your monthly savings. At times you can decrease your savings due to some emergency situation but that decrease should be temporary and get back to the normal amount you have been saved after that situation has been resolved.

More tips will be shared in the upcoming post. Do check for more interesting post.

Regards,

Sam Salleh