How much money should you save each month?

01 Jul, 2020

Do you find that at the end of the month there is nothing left and often you find yourself waiting for your next monies to hit your bank account?

You are not alone many people live from payday to payday, often playing ‘catchup’ to pay bills when they get paid.

Did you know that:

  • 27% of Australians have more than $50,000 in savings or accessible funds
  • 24% have between $10,000 and $50,000.
  • 49% have less than $10,000
  • 39% have less than $1,500 in savings or accessible funds.

Whichever statistic you fit into it is pretty scary. It has no doubt taken you many months to put monies aside especially with all the expenses you have commitments to let alone the money you need to spend on enjoying your life.

So how do you go about saving?

If there is money left over at the end of the month maybe save whatever is left over? That’s good in theory but you may not have any money left.

There is a saying “Pay Yourself First”. Unless you make a concerted effort to put yourself and your savings first save, no one else will. No one cares about your money more than you.

To achieve anything in life you need to have a purpose and with saving you also need a purpose for your putting money aside. Your purpose needs to be important to you, so important that you will save some of the money you earn before you spend it.

Your purpose maybe your next holiday, a car, home renovations, or it might just be to have money set aside when you need it most so that you are never in ‘fear’ of having nothing.

How do you ensure you achieve your purpose?

Decide on how much you ‘want’ to pay yourself each month – it should be no less than 10% of the one you earn, then take action.

Taking action may not as hard as you may think. The best way is to:

  • be consistent – set a fixed saving amount each month – minimum 10%
  • treat it like any other expense or bill you have
  • write it done, put it with you other expenses and “Pay Yourself First” before you do anything else.

Savings with no purpose plus no commitment plus no consistent amount = being in the 39% of Australians that have less than $1,500 saved.

Savings with purpose plus commitment plus a consistent amount = being in the 27% of Australians that have more than $50,000 saved.

Which one do you want to be?

Do not save what is left after spending but spend what is left after saving.

Warren Buffet