How much of my Salary should I be saving?

BlueTree

Hi,

Anyone know roughly what percentage of my salary I should be saving? (for nothing in particular, just to put away)

I know it will depend on many factors such as salary amount, lifestyle, age etc..

But roughly speaking for a person in early 20's?

I Just have a feeling I may not be allocating enough for savings, which may come back to haunt me when I get older

Any advice would be great.

Thanks

Lokolo

I save between 25-40%. On a net take home of £1250.

jennifernil

DD is 24, she saves 750 out of about 2000 regularly. Plus whatever she does not need that month.

She has no mortgage however, but pays 220 pm for her flat. Plus bills and insurance.

opinions4u

As much as possible. It varies from individual to individual and for some it will be savings (e.g. bank accounts) and for others it will be investing (e.g. stock market).

There's saving for known events (e.g. Christmas, holidays, car insurance renewal etc).

There's saving for unknown events that may or may not happen (e.g. car repair, failure of an electrical item like washing machine, tv or laptop).

There's saving for contingency (e.g. having a cushion of 3-6 months of net pay to cover unexpected job loss or illness).

There's saving for lifestyle objectives (e.g. home deposit, school fees, ear;y retirement etc).

There's saving for the unknown - simply because you earn more than you need to spend.

If you live with parents, but aspire to own your own home, you would ideally be saving an amount equal to the household bills and mortgage payments that you would expect to need. To prove you can afford it all!

All I would say is that simply accumulating money at the expense of enjoying life is pointless. But accumulating money to buy significant items that allow you to enjoy life more than mindless drinking every weekend is a good thing!

Rollinghome

opinions4u wrote: »

There's saving for known events... There's saving for unknown events that may or may not happen... There's saving for contingency...There's saving for the unknown - simply because you earn more than you need to spend...

Never forgetting of course the wise words of Rummy...

"As we know, there are known knowns, there are things we know we know, we also know there are known unknowns, that is to say we know there are some things we do not know, but there are also unknown unknowns, the ones we don't know we don't know."

greyster

there isn't really a correct answer, its down to many things like are you living at home and what lifestyle you have. I used to save more in my lesser paid job a few years back, now I enjoy living in a bigger apartment and thus less money going into my savings account. I'm trying to cut my spendings in some areas but all in all, my rent is quite a lot at the moment.

It is a life choice but taking control of your costs and moneysaving where possible, is the best you can do. Don't let it take over your life though, you only live once. You need to have some comforts to be happy, and most comforts can cost money so the piggy bank needs to be hit sometimes.

natman

For me its more about routine, getting into the habbit of saving instead of spending.

If you can see your nest egg grow every month, every year etc it motivates me to save more.
The biggy is lifestyle and bills and asking yourself when spending money do you need it or do you want it........................

If your outgoings are minimal, save save save, as the older you get or the more things that come along - houses, rent, mortgages, kids etc the more it takes from your disposable income.

My wife and I earn between us after tax, NI and pensions around - £2600. We do have a house and 2 cars but no kids, We save around £750 - £900 a month depending on whats happening in that month.

Like i said before its getting into the habbit and watching your savings grow for me.................... I have been saving for about 6 years for nothing in particular, but its great when you see the pennies all added together!

pawlala

natman do you overpay your mortgage?

maddapple

What would you class as saving? Would you class pension payments and share schemes as saving?

sss555s

I'd say after taking off expenses like mortgage/rent, council tax, utility bills, land line and basic food you should look to save half of what's left.

greenface

I would say im not a good saver but i dont waste money and value for money can be more important than value of money . EG. Its not worth saving £2000 for a new three piece suite. If you know how and where to get it for £1200