Your personal savings rate is the biggest factor in building financial security. Even more so than income or investment returns. But how much should you save? $50 per month? 50% of your paycheck? Nothing until you’re out of debt or can start earning more money?
How much should you save every month?
Most experts would tell you that you should be saving 20% of your income every month.
According to the 50/30/20 rule, you should set aside 50% of your budget for essentials like rent and food, 30% for discretionary spending (shopping, entertainment, lattes, etc.), and at least 20% for savings.
But everyone has a different financial situation. Some people can’t afford to save 20% and still be able to pay their essential bills. Others have the fortune of being able to contribute more than 20% and still live comfortably.
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