To say a fixed percentage would not be correct in my opinion. Why? Each of us has a different monthly income and the expenses are different. Thus, the percentage would be different for each of us.
Let’s say that we use 10% of our income to save, so it’s easier for a person with a monthly income of 5,000 euros to reach this sum than with an income of 2,000 euros. Only what can we now orient ourselves to? For this I have some useful tips and suggestions for you.
Define a feasible savings amount
Make a financial overview and select a savings amount that you can put aside every month. It does not matter what the amount of money is. It could be 20 euros a month, 50 euros, 100 euros or more. The savings should be chosen so that you can easily do without this sum. Now try to save this amount of money over several months, it is best to pay this amount to an extra account.
Very important in the calculation is the disposable income. This is therefore the amount of money that is available to you after deducting the monthly fixed costs.
My tip: Even small savings are not to be underestimated, over a longer period accumulates a larger savings amount.
Gradually increase the savings amount
If you have saved your fixed monthly amount for several months, so you can now consider whether this savings can not be increased. For example, if your savings amount to 50 euros a month, an increase to 100 euros would be quite conceivable. Mind you, the increase should only be chosen so high that it is financially feasible.
Where should I take the money from? Among other things, one possibility would be to optimize your own finances and achieve this goal through various savings tips. The resulting savings can thus be used for it.
Repay loans faster
If you are currently repaying a loan to the bank, you could keep your current savings and use the optimization savings to repay the loan faster. For example, let’s assume that your current savings amount is 100 euros, and by applying savings tips you can now spend another 100 euros per month. You take this 100 now for the repayment of your loan, this makes after all 1,200 euros, in 5 years it is already 6,000 euros and in 10 years again 12,000 euros.
Is this approach worthwhile? Definite. On the one hand, the repayment term is shortened and on the other hand, this increases your financial flexibility as soon as the loan is paid off. If you want, you can increase your savings again.
Is it even worth saving part of your income?
It’s even worth it. Take advantage of the opportunity and put a portion of your income aside, this increases your financial scope, which also serves as a hedge. Anyone who deliberately deals with and optimizes their finances will always benefit from it in the long term.
Summary – What percentage of income should be saved?
Choose an amount of money that you can easily save. Create a financial overview. If you were able to keep this monthly savings for several months, then use the opportunity to increase the savings amount.