Your saving rate is the largest factor in creating financial security, but what amount should you save each month?
The popular 50/30/20 rule recommends that you should keep 50 per cent of your budget for food and rent, 30 per cent for discretionary spending, and 20 per cent or more for savings.
If withholding 20 per cent of your income feels impossible, you shouldn’t be frustrated. Saving a little beats saving nothing.
Where should I save?
Online savings accounts are a good way to begin saving. Some of the best rates are online.
Why save 20 per cent?
Assuming that you are in your 20s or 30s and earn an investment return of around five per cent a year, you will need to save approximately 20 per cent of your income to set your cap at financial independence by the time you retire. The Money Advice Service has …