Are you wondering, “how much money should I be saving each month?” With an ever-changing economy and the need for financial security, it’s essential to develop a solid savings plan. In this blog post, we’ll explore the recommended percentages, various saving strategies, and useful resources to help you build a healthy savings account.
Determine your monthly savings goal:
Financial experts recommend saving at least 20% of your income each month. This percentage can be divided into different categories, such as emergency funds, retirement savings, and other financial goals. However, personal circumstances and priorities can affect this percentage, so it’s essential to evaluate your situation and tailor your savings plan accordingly.
Create an emergency fund:
An emergency fund is a crucial aspect of financial security, as it can cover unexpected expenses, like medical bills, car repairs, or job loss. Aim to save at least 3-6 months’ worth of living expenses in a separate, easily accessible account. Websites like NerdWallet offer valuable advice on building and maintaining an emergency fund.
Focus on retirement savings:
Setting aside money for retirement is a long-term investment in your future well-being. Experts suggest saving 10-15% of your income for retirement. For detailed information on various retirement savings plans and strategies, visit Investopedia’s Retirement Planning.
Set personal financial goals:
Apart from emergency and retirement savings, you may have other financial goals, such as buying a house, starting a business, or funding your child’s education. Determine the amount needed for these goals and create a timeline to achieve them. Utilize resources like Bankrate’s Savings Calculators to estimate your savings requirements and timeline.
Budgeting is key:
A well-structured budget can help you allocate your income effectively, ensuring that you meet your monthly savings goals. Apps like Mint and You Need a Budget can simplify the budgeting process and help you track your expenses and savings progress.
Cut expenses and increase income:
To reach your monthly savings goals, consider reducing expenses and finding ways to increase your income. Websites like The Simple Dollar provide practical tips for cutting costs, while FlexJobs can help you explore side hustles or part-time work opportunities.
While the recommended monthly savings percentage is 20%, it’s important to remember that personal circumstances and priorities can vary. By establishing an emergency fund, focusing on retirement savings, setting personal financial goals, and following a well-structured budget, you can work towards achieving financial security and peace of mind. Utilize the external resources mentioned above to enhance your financial knowledge and build a robust savings plan tailored to your needs.
Contact Ark Wealth Advisors for more information and to get started with your financial plan today!