There’s a lot that goes into saving money. You need to be consistent with it, but it needs to match your budget. If you’re struggling with figuring out how much you should be saving each paycheck, this guide can help. Let’s talk money.
Make a Budget
If you’re just spending willy-nilly out of your check right now, the first thing you’re going to need to do is make a budget. You’ve got to get a handle on where those dollars are going first. That’s going to be necessary before you figure out how much to save! You need to figure out how much you’re spending.
Twenty Percent is a Good Start
As a general rule, it’s a good idea to save about twenty percent of your paycheck each month. That might sound like a lot, but it’s something you should really consider making sacrifices for. Maybe you could spend a bit less on restaurants, or buy new clothes less frequently, to make room for saving in the budget.
Financially Burdened
Maybe you’re not able to save twenty percent of your paycheck because your necessities eat up too much for that to be feasible. If that’s the case, you’ll need to make some adjustments soon. Having so much of your income eaten up by your bills is completely unsustainable and is a much bigger concern than saving up a rainy day fund.
Getting it Under Control
There are a few things you can do to free up some money in the budget for saving. The first is to, of course, look for a job that has better pay. If that’s not an option, consider shifting your lifestyle to shrink your bills. Could you downsize to a smaller home, or drive an older car? These things could make your monthly expenses much lower.
Finding More in the Budget
You’d also be surprised at how much you could save if you put your mind to it. Doing a few simple things, like eating at home more often or renting movies from the library instead of having streaming services, can free up an extra $100 per month for your savings. Speaking of, there are a few ways to make yourself stick to that savings plan you make for yourself.
Automate Your Savings
The most critical way to get your savings to be consistent is to automate it. You can set up your direct deposit to go straight into your savings account so you never even have a chance to see the money you’re “losing” to your other account. That’s a surefire way to stay consistent!
Cash Diet
You could also choose to spend money only in cash, taking out your spending money in cash at the start of each pay period. This will let you leave your savings alone because you’ll only spend the money you have on hand. This “cash diet” is also a good way to keep yourself from running up big credit card bills.
Adjusting Your Savings
Maybe you need to save more or less than 20 percent of your income for whatever reason. That’s fine! The main thing to do is remember that each month is different, and, as long as you’re saving something, you’re on the right track.
Read More: Beginner Budgeting Tips: The Basics
Consider Your Goals
Maybe you can afford to save more than just 20 percent of your pay. Consider your financial goals. Do you need to pick up the pace to get enough saved up in time? There’s nothing wrong with increasing your savings amount in the short term to meet an important deadline, like the week you want to go on vacation, before dropping it back down once you’ve met your goal.
Read More: When is the Right Time to Start Saving?
Save What You Can
Really, it’s best to not even get tripped up on the exact percentages you’re saving. As long as you stay consistent and try to keep up with your savings routine, you’re doing the right thing. The important thing is just that you find a savings cadence you can stick to so you can hit your goals!
Read More: How to Save Money with the Cash Diet
