How much should be your personal savings each month?

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How you should organize your money and budget?

If you’re a high-income earner, you’d be wise to keep your expenses low and maximize the percentage of your income that you save each month. If an unexpected expense comes up, you’ll have money to pay for it because you saved!

If you are not a high-income earner, and if saving 20% of your income seems implausible, or even impossible at the moment, don’t worry. Saving 20% is just a suggestion. Ideally, we would save 100% if we could. So even if you can save 20% just remember that saving something is better than nothing.

However, don’t use this as an excuse to not save at all. If you want a shot at being secure through old age and having some extra cash for things you want, then I suggest that 20% is the number you’ll want to reach or exceed.

Why 20%?

Assuming you’re in your 20s or 30s and can earn an average investment return of 5% a year, you’ll need to save about 20% of your income to have a shot at achieving financial independence before you’re too old to enjoy it.