This question has been asked many many times throughout working adults. Just how much should we save ? This is also a popular topic among financial advisor or wealth management agents.
Unlike the US financial advisors, who are really advisors, Asia’s financial advisor are slightly different. Insted of really advise you on how to manage your wealth, they actually look at your income and assets status, and then try to sell you a product. It may be insurance or wealth linked, but that’s not the point. I guess 9 out of 10 advisor does that.
This is real bad for us, as we don’t already have enough money to be in the comfort zone. Besides, there aren’t many people who can manage wealth very well. That is why we need to learn how to do our own money planning. (Hate to use this “wealth” word, because not many are rich enough to be wealthy.)
Like they say, a general rule of thumb is to save 10% of what you earn. I do reckon that this is adequate, but do we have the discipline ? A simple way is to treat that 10% as a kind of expense, and pay it to somewhere else.
Trick your mind to accept the fact that it is always necessary to first pay yourself, park it somewhere. With that in mind, then we are able to move on to where to park that 10% of your income. You might think that 10% is very little, but if let’s say you earn between 3-5k a month, that will amount to 300-500 a month, which is enough as a form of disciplined saving.
In summary (% of your income):
Single:
20% - Normal Savings
10% - For short-mid term goals
5-10% - Insurance
Not Single:
10%-20% - Normal Savings
10% - For short-mid term goals
Above viagra price 10% - Insurance for you and your family
As for me, I prefer a higher percentage, roughly 20-40% of your savings, if you are aged between 20-28 or so. In other words, if you are a graduate who just came out to work, and you don’t have a family yet. In some of my money management posts, I have posted a $500 monthly savings to Citibank savings account, and a $300 to a local bank savings account. That is between the range of 20-40%.
But, depending on situations, saving your money in banks won’t make you wealthy. It is always better to put the money into good use instead of earning low interest from the bank. Still the bare minimum is 10%, and we should always practise that.
:) 