I had an interesting discussion with my friend recently on Savings. We wanted to know how much should you save from your salary?
First of all, why do we save?
Retirement? Rain check for bad time? Vacation and fun? Future prospects? or may be for all of these.
Say you are planning for your retirement (like 401K or any retirement policy) and you think you have earned enough to take care of recession, health issues and have enough saved for any small issues of life, do you still need to save? When do you think that we need not save anymore?
Well we just decided it all ends at your perspective.
There is no logical amount or % of your salary that can be determined, in general is needed to be saved by every person. Some people may not save and still lead a happy life, some may need not save and some may end up saving all their life for something or nothing. Some may feel its never enough savings and some may feel they need not save. So its just their perspective.
But from what I have read and heard about planning your future, a 10% saving of your salary is generally advised at least and upto a 40% depending on your requirement.
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3 comments:
Thanks for visiting my blog :)
You have a nice blog here.. though I yet to see everything :)
Savings, I feel 30% of your earnings sounds reasonable. But I don't think we should ever stop saving. As long as we earn, we should save some amount of it so that we can use it for our own future.
I guess there is nothing like % but i feel out of your saving some of them need to be invested.
You should be realistic in choosing savings % ,so that you can contribute the same % every month.. Like , I decided to save .000001% of my sal every month
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