How Much Money Should You Save Every Month for a Secured Future?

Saving a portion of your salary every month can be a tricky task. However, it is as exercising for living a financially healthy lifestyle. Are you planning to start your savings journey today? Here is a detailed guide on how much of your income you should save every month so that you can plan accordingly.

Finding it difficult to save a portion of your salary every month? Here are some expert tips that can guide you to save a sufficient portion of your earnings effectively:

• Prepare a Budget and Follow It: To prepare a realistic budget, tracking your expenses for at least two months is mandatory. Once done, you can minimise your expenditure on necessities and cut down your money on unnecessary ones. For example, paying your electricity bill is a necessity. However, you can take measures to lower the bills to save more.
• Also, you can bring your lunch from home every day instead of eating outside. This will help you cut down unnecessary expenses on street food. Apart from this, there are several other arenas where you can make some reductions and exclusions on cost. Once you start doing so, you will notice a prompt increase in savings. 
• Invest Money in Savings Plans: Once you start saving more, deposit a portion of it into different investment plans. This will help you in wealth creation and reaching your financial goals at the earliest. However, gathering knowledge about the different options is mandatory before starting your investments. This is important because you can know if you should go for low-risk, low-returns investment options, high-risk, high-returns plans or hybrid options. It will help you in making wise financial decisions so that you can benefit immensely. Also, it will open up more opportunities for you to build wealth.
• Adopt the Envelope System: This is a popular step that you can take to allocate your savings into various groups. For this, take a few envelopes according to the number of expenditures you have. Then divide the money per the goals you mentioned on the envelope. For instance, if you want to put aside money for paying an electricity bill, you can keep the required amount in an envelope. Similarly, you can do the same for food, clothes, rent, travel and other necessary spending.  Following these tips can help you to put aside an adequate amount of your money. Wondering how much would be sufficient? Read on to find out!

“How much should I save every month" is a common thought when planning to begin their savings journey. Generally, it is said to keep at least 20% of your monthly income in the savings account. However, the amount differs from one person to another. 

Here is an estimation of the amount of money that you should save according to various timelines:

• Lifetime: These goals require a substantial amount of money you might need to save for a lifetime. A few of them include retirement plans, purchasing a new house, and so on.
• Less than a Decade: To fulfil these goals, you must put your money into different investment plans to build an adequate amount as per your goal. Some of the common plans include purchasing a car or refurnishing your home.
• Less than a Year: This financial goal usually includes purchasing gadgets or exotic vacations. So, to fund these expenses, you can rely on your short-term savings.

What is the need for saving so much? Here are some crucial reasons why it becomes mandatory to save and invest strategically.

Knowing the reasons behind saving some of your earnings will motivate you and help you build financial discipline. Here are some of the primary reasons which make it vital to save money:

1. Increases financial security: Once you start saving, it can help you lead a worry-free life. You will always have extra money that you can use to cover your unplanned expenses. Thus, you can focus on improving other aspects of your life.
2. Protects you from monetary emergencies: Big-ticket emergencies can crop up anytime. These can often include medical emergencies, job loss due to recession, etc. You can also create a contingency fund to cover these expenses and stay financially protected.
3. Provides you financial independence: Do you need to regularly borrow money from your friends and family during the month's end? Financial independence can increase the value of your opinions and earn you respect from loved ones. So, it becomes essential to save as much as possible.
4. Helps you increase your investments: Making the right investments can undoubtedly lead to increased wealth creation. On top of it, increasing those investments every year can lead to a speed-up in the wealth creation process. However, you can invest more only when you increase your savings.
5. Aids in planning your retirement: Accumulating substantial wealth for your retirement allows you to live independently even when the monthly cash inflow evaporates. Also, you can fulfil all your life goals without financial barriers. Now that you know how much of your income you should save every month, it becomes mandatory to begin immediately. This gives you sufficient time to accumulate immense wealth by retirement. Also, you can fulfil all your financial goals at the estimated time without facing any hurdles.