Feeling the squeeze with bills going Up? Here’s some tips how to save money each month
Working out how to save money each month can seriously increase your contributions to your savings goals. The hardest part? Getting started. Once you’ve found the money-saving tips and tricks that work for you, saving becomes a habit rather than a chore.
With that in mind, let’s look at one saving and budgeting method that may help you reach that 20% savings target. It’s called the 50-3020 rule.
And nothing says “habit” quite like a monthly goal. Setting a target to achieve each month can give you the consistency necessary to build up a healthy savings account over time. Read on to discover the secrets to saving money each month, so you can start improving your financial health today.
If you’re looking for an accessible, easy-to-remember budgeting tool, look no further than the 50-30-20 rule. Created by US Senator Elizabeth Warren when she was a law professor specializing in bankruptcy law, the 50-3020 rule suggests breaking down your monthly expenditures according to the following rules:
How much money should I save each month?
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50% of your gross income should go towards your needs, e.g., rent, utilities, debt repayments
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30% should go towards your wants, e.g., eating out, gym subscriptions, holidays
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20% should go towards your savings goals
How much money you should save each month depends on your lifestyle and expenses. A good target to aim for is 20% of your overall income, but you should feel empowered to start lower if that seems like too much of a stretch. Remember: Every little bit counts. So, how do you know if a 20% savings target is too high or too low? It starts with assessing your current cash flow. Take some time to calculate your monthly income and expenditures — basically, the money coming in and the money going out of your bank account. Keep tabs on any expenses that predictably recur each month, such as your rent, and any that fluctuate based on your spending habits. Before we get into actual savings methods, let’s get something out of the way. Saving money doesn’t have to be painful. In fact, you probably should allow yourself a little wiggle room to enjoy yourself — within reason. If you’re too hard on yourself, you may develop an “all-or-nothing” mentality that ultimately undermines your savings goals. 12
How to use the 50-30-20 rule
