How much of your income should you be saving? Is there a specific percentage that you should follow?
I’m not sure. I always see this 50% number being thrown around. I’ve seen other random numbers thrown out about how much you should be saving. Today I wanted to look at this 50% figure and throw out my thoughts on it.
Is it even possible to save 50% of your income?
This really depends on the obvious variables: how much you make vs how much you spend.
If you make very little money it’s going to be more difficult for you to save half of your income. Conversely, if you make a killing, you’ll have an easier time hitting your targets.
It is possible to save half of your income, you just need to be making some decent money to do so.
What if you can’t save 50% of your income?
It’s not the end of the world if you can’t save 50% of your income. It really isn’t. You just save as much of your income as possible without dwelling on the actual percentage that it happens to be. It could be 10%, 20, or even 49. All that matters is that you’re saving some money, right?
What do you do with the other 50%?
You save half of your money. What about the rest of your income?
You pay your bills, live life and buy stupid crap to be honest. Expenses will always eat up a large chunk of your income. There’s nothing you can do about this really. The best that you can do is lower your expenses, find a cheap place to live in, prepare your own meals, and cut out the junk. You can try to cut your expense to the bare bone. Just please don’t ruin the quality of your life to the point that you’re always miserable. That defeats the purpose of life.
One other thing that I recommend is that you reward yourself. This means that you take a small chunk of your income every pay and spend it on stupid crap. This can be binge drinking, magazines, or whatever else comes to mind. Have some fun!
How much do I save?
I don’t do percentages nor do I keep a budget. This is my Personal Finance Blogger confession for the day. I don’t do any of that budgeting stuff. I work my butt off every day and double on Sundays. I save what I can. Spend what I need to on expenses and then find ways to make more money. Pretty simple strategy there. All that matters is that I’m happy with how much money I have saved at the end of the day.
Those are my thoughts on saving a portion of your income. It’s your money and I’m here to help you keep more of it.
How much of your income are you able to save?