budgeting for beginners

How much should you save each month?

Saving money can be difficult, especially when you’re not sure how much you should save each month. You may have heard that you should be saving 10-20% of your monthly income, but what does that really mean for you?

When it comes to saving money, there is no one-size-fits-all answer. The amount you should save each month depends on a variety of factors, including your income, your age, your current debt obligations, and your financial goals.

That said, there are some general guidelines you can follow to help you determine how much you should be saving each month.

  • If you’re just starting out, try to save at least 10% of your income.
  • If you’re already doing a good job of saving, aim to increase your savings rate by 1-2%.
  • Once you get closer to retirement, you may want to start saving even more, depending on how much you think you’ll need to cover your costs.

Of course, these are just general guidelines. The best way to figure out how much you should be saving each month is to take a close look at your own finances and make a plan that makes sense for you.

If you’re not sure where to start, consider working with a financial planner or advisor. They can help you assess your situation and develop a saving strategy that meets your unique needs.

Saving money is important, but it’s also important to make sure you’re not sacrificing your quality of life in the process.

If you’re struggling to save as much as you’d like, take a close look at your budget and see where you can cut back on expenses. There’s no need to deprive yourself, but making small changes in your spending habits can free up more money to put towards savings.

Start with the end in mind

One of the most important things to remember when trying to save money is that you should have a goal in mind. This could be saving up for a down payment on a house, a new car, or even just having a buffer in case of an unexpected financial emergency.

Once you have a goal in mind, you can start to figure out how much you’ll need to save each month in order to reach it.

If you’re not sure where to start, a good rule of thumb is to save 10% of your monthly income. So, if you make Php 30,000 per month, you should aim to save Php 3,000 per month. Of course, this may not be possible for everyone, but it’s a good starting point.

If you find that you’re able to save more than 10% of your income each month, great! But don’t feel like you need to break the bank in order to reach your savings goals. Even if you can only save Php 1,000 or Php 2,000 per month, it will all add up over time.

Another thing to keep in mind is that your savings goals may change over time. As your income changes or as your financial situation changes, you may need to adjust how much you’re saving each month. That’s why it’s important to revisit your savings goals on a regular basis and make sure you’re still on track.

Why is it important to save money

Imagine this: You’re out of a job, and your bills are piling up. You have to choose between paying rent or putting food on the table. What do you do?

If you had been saving money, you would have had a cushion to fall back on. When you don’t have any savings, you’re in a much more precarious financial position.

Here are some reasons why it’s important to save money:

It allows you to build an emergency fund.

If you have money saved, you’ll be able to cover unexpected expenses like car repairs or medical bills. You’ll also be able to weather a layoff or other income interruption more easily. Having an emergency fund allows you to build a cushion in case of tough times.

It helps you stay out of debt.

If you’re used to living on credit, it can be tough to break the habit. But carrying debt is expensive and can put a lot of stress on your life. Building up a savings gives you a buffer so you’re less likely to rely on credit.

It gives you the opportunity to invest.

Investing is one of the smartest things you can do with your money. If you have cash on hand, you’ll be able to take advantage of opportunities as they come up. For example, you may be able to buy a property for a great price or invest in a business venture.

But if you don’t have any savings, you won’t be able to take advantage of opportunities to grow your money.

It gives you peace of mind and freedom to pursue your goals.

Knowing you have money saved can provide a huge sense of relief. If something comes up, you’ll know you have the resources to handle it. This peace of mind is priceless. You’ll have the freedom to pursue your goals without worrying about how you’ll pay your bills.

It enables you to live a comfortable retirement.

You’ll want to have enough saved so you can cover your basic expenses and enjoy your retirement years. If you don’t have a nest egg, you may have to work longer than you’d like or make drastic changes to your lifestyle.

Saving money is important for all of these reasons and more. Start setting aside money each month so you can reach your financial goals.

How to figure out how much you should save each month

If you’re like most people, you probably don’t have a very good handle on how much money you should be saving each month.

That’s understandable – it can be a difficult topic to wrap your head around. But it’s important to have a general idea of how much you should be saving, so that you can make sure you’re on track to reach your financial goals.

Here are a few steps you can take to figure out how much you should save each month:

1. Determine your net worth

Your net worth is the value of all your assets (property, savings, investments, etc.) minus any debts and other liabilities you may have. To calculate your net worth, simply add up the value of all your assets and subtract any debts you owe.

If your net worth is positive (i.e., you have more assets than debts), that’s a good sign. It means you’re in a good position to start saving for your future.

On the other hand, if your net worth is negative (i.e., you have more debts than assets), that’s a sign that you need to focus on getting out of debt before you start saving.

2. Establish your savings goals

Before you can start saving, you need to know what you’re saving for. Do you want to save for a down payment on a house? For retirement? For your child’s education?

Once you know what you’re saving for, you can start to figure out how much you need to save each month. Begin by estimating how much money you’ll need to reach your goal, and then break that down into monthly savings targets.

3. Review your expenses

Now that you know how much you need to save each month, it’s time to take a close look at your spending. Start by tracking your spending for a month or two, so that you can get an idea of where your money is going.

Once you have a good handle on your spending, you can start to identify areas where you can cut back. Reducing your spending will free up more money that you can put towards savings.

4. Compare your income to your expenses

Once you know how much you’re spending each month, it’s time to compare that to your income. If your monthly expenses are more than your income, that’s a sign that you need to make some changes.

You may need to find ways to increase your income or reduce your expenses. If you can’t do either of those things, you’ll need to re-evaluate your savings goals and figure out a way to save less each month.

5. Create a budget

Creating a budget is a good way to keep track of your income and expenses, and to make sure you’re not spending more than you can afford.

A budget will also help you make informed decisions about where to allocate your resources. For example, if you have a limited amount of money to work with each month, you may need to prioritize your savings goals.

If you need a guide in budgeting, you can download my FREE budgeting templates or watch my budgeting videos on Pinay Investor YouTube Channel.

6. Automate your savings

One of the best ways to make sure you’re saving enough money each month is to automate your savings. Automating your savings means setting up a system where money is automatically transferred from your checking account to your savings account each month.

This can help you stay on track with your savings goals, and it can also help you avoid the temptation to spend your savings.

7. Invest your savings

Once you’ve reached your savings goals, you may want to consider investing your money. Investing can help you grow your wealth and reach your financial goals even faster.

There are a lot of different ways to invest your money, so it’s important to do some research and figure out what’s right for you.

8. Live below your means

One of the best ways to save money is to live below your means. This means spending less than you earn, and living on a budget.

Living below your means can help you free up more money to save each month, and it can also help you reach your financial goals faster.

9. Make a plan

Saving money is important, but it’s not always easy. If you’re having trouble sticking to your savings goals, it may help to make a plan.

Making a plan can help you stay on track and reach your goals. It can also help you make informed decisions about where to allocate your resources.

10. Seek professional help

If you’re having trouble saving money, or if you’re not sure where to start, you may want to seek professional help.

There are a lot of different resources available, and a financial planner or advisor can help you figure out what’s right for you.

Average Savings by Age

This is a great question to ask yourself, because your savings goals will likely change as you age.

For example, when you’re in your 20s, you may be focused on saving for a down payment on a house or for retirement. But once you hit 30, you may want to start thinking about saving for your children’s education.

No matter what your age, though, it’s important to have a savings plan.

The following are some average savings goals by age, which can give you a better idea of how much you should be saving each month.

  • Age 20-30: Php 3,000-Php 10,000 per month
  • Age 30-40: Php 10,000-Php 30,000 per month
  • Age 40-50: Php 30,000-Php 50,000 per month
  • Age 50-60: Php 50,000-Php 100,000 per month

Of course, these are just averages, and your savings goals may be different. You’ll need to consider your own financial situation when setting your savings goals. But these averages can give you a good starting point for how much you should be saving each month.

While it’s useful to know how much you should typically have saved by age, that figure doesn’t necessarily represent the amount financial experts think you should have saved by each age.

There is really no one-size-fits-all number. However, experts say your savings – and savings goals – should be based on your lifestyle. That includes everything from your income and spending habits, to where you live, whether you own a car, have kids, pay rent or have a mortgage, and more.

Everyone has their own magic number based on their budget. So, if you’re wondering how much you should have saved by age 30, 40, or 50, the answer is: it depends.

Talk to a financial planner to get personalized financial plan based on your unique situation.

In the meantime, here are some general saving tips to keep in mind:

Start early: The earlier you start saving, the better. That’s because compound interest – or earning interest on your interest – has time to work its magic.

Save regularly: Try to make saving a habit by setting up automatic transfers into your savings account.

how much should you save each month

How to Save More Money Each Month

Saving money does require a bit of effort. If you want to save more money each month, here are few easy tips that can help.

Make a budget and stick to it

It can be difficult to save money each month, especially if you have a lot of expenses. One way to make sure you are saving as much money as possible is to create a budget. Sit down and figure out all of your income and expenses for the month.

Once you have everything figured out, start cutting back on some of your expenses. Maybe you can eat out less or spend less money on entertainment. There are a lot of ways to save money, you just have to be creative.

Cut back on unnecessary expenses

This could include things like eating out, buying new clothes, or getting your nails done. If you can live without these things, then you will be able to save a lot of money. You may not be able to cut back on all of your expenses, but every little bit helps.

Sell unused belongings online

If you have any belongings that you no longer use, consider selling them online. There are a lot of sites where you can sell things like clothes, furniture, and electronics. This is a great way to make some extra money and declutter your home at the same time.

You can also check out garage sales or consider online selling as another way to get rid of unwanted items and make some extra cash.

Brown bag your lunch instead of eating out

Eating out can be expensive, so packing your own lunch will save you a lot of money in the long run. You can also take leftovers from dinner to work for lunch the next day. This is a great way to save money and eat healthy at the same time.

Negotiate lower rates with service providers

One way to save money each month is to negotiate lower rates with service providers. This could include things like your cable company, your phone company, or your internet provider.

If you are unhappy with the rates you are currently paying, call and speak to a customer service representative. See if they are willing to lower your rates or offer any discounts. You may be surprised at how much money you can save each month just by asking.

Delay big purchases until you have the cash saved up

If you are thinking about making a big purchase, consider delaying it until you have the cash saved up. It can be tempting to put big purchases on credit, but this can end up costing you a lot of money in interest.

If you can wait and save up the money, you will be able to avoid paying interest and save money in the long run.

Use coupons, vouchers, and shop sales

One of the best ways to save money each month is to use coupons, vouchers, and shop sales. You can find a lot of vouchers online on Shopee and Lazada. You can also sign up for newsletters from your favorite stores so you will be alerted of any sales or special offers.

When you are planning your grocery list, make sure to check for coupons that you can use. You may be surprised at how much money you can save just by using coupons.

Use a credit card to earn rewards points

If you use a credit card, you can often earn rewards points that you can use for future purchases. You may also be able to find cards that offer cash back or other benefits. Just make sure that you are paying off your balance in full each month so you don’t end up paying interest on your purchases.

Use cash if you are an impulse spender

If you find that you often spend money on things you don’t need, try using cash instead of your credit card. This way, you will only be able to spend the money that you have on hand. This can help you to stick to your budget and avoid impulse purchases.

Meal Plan

Take the time to sit down and figure out what you are going to eat for the week. Meal planning can help you save money by avoiding last-minute trips to the grocery store and eating out. When you meal plan, you can also make sure you are eating healthy, which can save you money on medical bills in the long run.

Try a Savings Challenge

There are a lot of different challenges out there, but the basic idea is to save a certain amount of money each week or month. This can be a great way to jumpstart your savings and help you reach your financial goals.

You might want to start small by saving your loose coins at the end of each day. Or you could challenge yourself to save Php 200 a week. Once you reach your goal, you can increase the amount of money you save each week or month. There are a lot of different ways to do a savings challenge, so find one that works for you and give it a try.

Earn More Money

If you can find ways to bring in some extra cash, you will be able to reach your financial goals much faster. There are a lot of different ways to earn extra money. You could start a side hustle, sell items you no longer need, or take on some freelance work.

You may also ask for a raise at your current job or negotiate a higher pay rate for the same amount of effort. Or you may want to consider getting a better paying job with some great benefits, like health insurance and a retirement plan, that can help you save even more money.

There are a lot of ways to save money each month. You just have to get creative and find what works best for you. Try out some of these tips and see how much money you can save.

save money each month

Other ways to make your money work for you

You’ve been working hard at your job for a few years now and you’ve finally managed to save up a decent amount of money. You’re not quite sure what to do with it, though.

You could invest it in the stock market, mutual fund, UITF, or real estate, but you’re not too sure how that works. Or maybe you should just put it in a savings account so that it’s there if you need it.

But what if there was a way to make your money work harder for you? Here are a few ideas:

1. Property investment

Investing in property is a great way to get your money working for you. Not only will your investment appreciate over time, but you can also earn rental income from it. Just make sure that you do your research before investing, so that you know what you’re getting yourself into.

2. Start a business

If you have a great business idea, then why not start your own business? Not only will you be your own boss, but you’ll also be able to make a lot more money than you would if you were working for someone else. Of course, starting a business is a risky proposition, so make sure that you have a solid business plan before taking the plunge.

3. Invest in bonds

Bonds are a great way to get your money working for you. When you invest in bonds, you’re essentially lending money to the government or a corporation. In return, they agree to pay you interest on your investment. The great thing about bonds is that they’re relatively low-risk, so you can sleep easy knowing that your money is safe.

4. Invest in stocks

Investing in stocks is a great way to make a lot of money. Of course, it’s also a risky proposition, so you need to know what you’re doing before you get started. But if you’re willing to take the risk, then investing in stocks could make you a lot of money.

5. Put your money in a high-yield savings account

Putting your money in a savings account is a great way to get it working for you. Not only will your money earn interest, but you’ll also have access to it if you need it. Just make sure that you choose a high-yield savings account so that you can get the most out of your investment.

These are just a few of the ways that you can make your money work for you. Just remember to do your research before making any decisions, so that you can make the best decision for your needs.

Final Thoughts

So, how much should you save each month? The answer may vary based on your unique financial situation, but we recommend aiming to save 10-20% of your income. This will help you cover unexpected expenses and reach your long-term savings goals.

It’s also important to be mindful of your spending habits and make changes where necessary. If you can stick to a budget and live within your means, you’ll be on the right track to financial success.

I hope that this article has provided you with a good starting point for determining how much you should be saving each month. Stay diligent and stay on track, and you’ll reach your long-term savings goals in no time!

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