Truth to be told, saving money are harder as you grow older. Sure, you earn more as you gain experience in your career and progress forward. At the same time, spendings that you didn’t know existed before start making themselves known. This sometimes make me wonder how do people save money for their retirement and rainy days.
In this article, we will look at how we can possibly manage our income and spendings to save our first $50k, which will probably be spent like flowing water for the wedding / house renovations. HA.
Below is a brief idea of how many percentage of your salary you need to save per month in order to hit that sweet pot of $50k based on your salary, assuming the salary remains status quo.
*savings % after CPF deduction
First thing you would need to establish, would be the number of years you have to save before you wish to reach your goal. For those that are starting out early, this little fund account usually goes to the renovation / wedding. With HDB BTO being the most common method for citizens to buy their house, you usually get a timeline of when it will be ready, and you would have a headstart to start planning the finances.
If you are otherwise earning that amount, but have not been hitting that monthly savings goal, it could be time for you to review your spendings. Are you paying too much for your mobile bill? Could this spending be reduced? It is always an ongoing process to eliminate excessive or unnecessary spendings to ensure that you are on the right track.
Expectations and Income
If somehow you have optimised your spendings and are still unable to hit your monthly savings goal, do not fret. This could mean that you need to look for an increase in income, or readjust your goal expectations. A betterment in your income would allow you to reach your goals faster without compromising your quality of life. If you see yourself stretching too tight, reconsider your expectations. Don’t burnt yourself out trying to reach an arbitrary goal.
The above table provides a guideline in helping you visualise how you much you need to reserve out of your salary to save up that pot of money. There will be some months that you spend more than expected due to unforeseen situation, but do not despair. The important takeaway is to be consistent and conscious of your money inflow and outflow.
All the best in saving!