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How Much Money You Should Have Saved at Different Stages of Your Life

How Much Money You Should Have Saved at Different Stages of Your Life

Would you love to be financially independent? Personally, it means having enough money to do whatever you need to be done without having to worry about the state of your finances because your finance is still great.

Yes, I know saving can be quite difficult. But I’ve found that being too strict with savings can boomerang, you have to give little leeway to enjoy yourself and still save. You don’t have to cut off every enjoyable thing in your life to be able to save. So, my advice? Don’t be too strict on yourself about it, you can have fun while saving enough for the future.

This is achievable, yes, you can do it! Let’s see what you can do to make saving easier:

Important Rules to Follow When You Save Money

  • You do not necessarily have to have a specific sum. Instead, you should have a specific percentage.
  • A specific percentage is important because the percentage would adjust as your income and profit increase or decrease, without affecting your livelihood.
  • You do not have to increase your spending rate to match your income. Instead, you should rather increase your saving percentage if you find that you have a lot more money left after your taxes, expenses and bills have been met.
  • Collecting precious items can be an interesting idea to save money. You can collect gold, silver, diamond or anything that keeps appreciating irrespective of inflation.

How Much You Should Save at Different Stages of Your Life

The Stage of Starting your Career

At this stage, you are most probably in your 20s and saving is very unlikely to be a priority as there are numerous expenses. However, it is reasonable that you should aim to save 25% of your overall income yearly. This means that you would try to cover up all your expense (including debt repayment) with 75% and make sure you DO NOT exceed that. If you properly plan your budget, you should be able to save enough for the future.

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    The Stage of Bringing up a Family

    At this stage, you are in your 30s, 40s, and 50s and long term saving is even more difficult with lots of responsibilities, in addition to short and medium term savings for emergencies and children’s college fees. However, it is advisable that you should have twice the equivalent of your annual income saved up every five years. For example if your annual income is $50,000, you should aim at saving up to $100,000 in 5 years.

    Have your savings account linked to your main account so you can transfer your agreed funds into it at the start of each month. This would make it easier to save and remove procrastination.

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      Photo credit: Source

      The Stage of Thinking of Future Retirement

      At this stage you should take stock of your savings and work out what you might realistically expect from your lifelong savings plans.

      Through all the saving stages, some tips to help you achieve your main saving goals include:

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      Staying on top of your debts and getting a good credit score.

      Your credit score is your financial history and if things get dire you might need to get a loan and you want to be sure that you have been paying off your debts and keeping a clean financial slate.

      Having an emergency fund

      When emergencies happen or you lose job, to avoid dipping into your long term or retirement savings, you can fall back on your emergency funds.

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      At the end of the day, saving towards retirement is a long game of saving and saving and saving money. If you are unable to meet your saving goals, it does not make you a failure. The important thing is to get back on track as soon as you can.

        Photo credit: Source

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        Kyra Taylor

        Writer and Lawyer

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        Published on October 8, 2018

        13 Incredibly Useful Tactics to Help You to Stick to Your Family Budget

        13 Incredibly Useful Tactics to Help You to Stick to Your Family Budget

        Are you having trouble sticking to a family budget? You aren’t alone.

        Budgeting is difficult. Creating one is hard enough, but actually sticking to it is a whole other issue. Things come up. Desires and cravings happen. And the next thing you know, budgets break.

        So how can you stick to a family budget? Here are 13 tips to make it easier.

        1. Choose a major category each month to attack

        As the saying goes, “Rome wasn’t built in a day.” With that in mind, one approach to help you get into the habit of sticking to a budget is simply starting slow.

        Spend too much on Starbucks runs, eat out too often, and have an out-of-this-world grocery bill? Choose one bad habit and attack.

        By choosing one behavior to focus on, you’ll prevent yourself from being overwhelmed. You’ll also experience small victories, which help you gain positive momentum. This momentum can then carry over into your overall budget.

        2. Only make major purchases in the morning

        If you’re making large purchases in the evening, there’s a good chance you’re doing so after a long day and you’re probably tired.

        Why does this matter? Because our judgement tends to be off when tired – our willpower is compromised.

        Instead, only make major purchasing decisions in the morning when you’re energized and refreshed. Your brain will be firing on all cylinders and your resolve will be high. You’re less likely to give in and settle at this point.

        3. Don’t go to the grocery store hungry

        Have trouble with impulse buys at the grocery store? If so, there’s a good chance you’re going grocery shopping while hungry.

        The problem here is that when you’re hungry, everything looks good. So you’re more likely to make split decisions on things that aren’t on your grocery list.

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        Instead, make sure you eat prior to your grocery store trip. Then take your list, along with your full stomach, and go shopping. Notice how food doesn’t look quite so good when you’re not fighting cravings.

        4. Read one-star reviews for products

        Is there a product you just have to have (but maybe not really)? Check out the one-star reviews.

        By reading all the horrible reviews, you may be able to basically trick yourself into deciding that the product isn’t worth your time and money.

        Next thing you know, you didn’t make the purchase, you saved the money, and you feel good about the decision.

        5. Never buy anything you put in an online shopping cart until the next day

        If you are making a purchase online, it’s typically a two-step process. First, you click “Add to Cart” and then you go in to review your cart and pay.

        The problem is that there not typically much reviewing during step two. It’s generally click pay and there you go. However, this is the perfect point to stop for reflection.

        Once you add to your cart, your best bet is to step away until the next day. Let the item sit there and grow cold, so to speak.

        This gives you a night to “sleep on it” and decide if you really want and need to spend that money. If you wake up the next day and still find the purchase viable, then perhaps it’s time to go for it.

        6. Don’t save your credit card info on any site you shop on

        One of the other pitfalls of shopping online is that fact that most sites ask you to save your credit card information.

        While the sites will frame it as a method of convenience, the truth is they know you’ll spend more money in the long run if your credit card information is saved.

        The “convenience” takes away one last decision-making point in the purchasing process. True, it’s a pain to get out your credit card and enter the information every time. But guess what? That’s the point. If that inconvenience helps you stay on budget, then it’s worth it. Which leads into the next tip.

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        7. Tape an “impulse buy” reminder to your credit card

        Credit cards make spending much easier than cash. When you spend cash, you can literally see your wallet emptying. A credit card comes out, then goes back in. No harm, no foul.

        That’s why it’s a good idea to tape a reminder to your credit card. Customize a message that is something along the lines of “do you really need this?” or “does it fit the budget?”

        That way when you pull out the card, you get one last reminder to help you question your decision and stick to your budget.

        8. Only use gift cards to shop on Amazon

        Amazon is probably the easiest place online to blow money. It’s just so easy to click and buy. However, one way you can slow the process down is buy only using gift cards. Here’s how it works.

        If you plan on making a purchase on Amazon, go to the grocery store and purchase a pre-loaded Amazon gift card of the proper amount. There’s no convenience fee, so you literally pay for the money you’ll spend.

        Now take that gift card home and load it to your Amazon account. There’s your money to spend.

        Why does this help? It makes you have to purposely go to the score and purchase the card in order to purchase the item. That’s a pretty deliberate thing that takes some time, commitment, and thought.

        This process will effectively kill the impulse buy.

        9. Budget using cash and envelopes

        As mentioned earlier, it’s a lot harder to spend cash than swipe a credit card. You can take this even farther by using only cash, and separating that cash by budget category.

        Create an envelope for each category and stick the cash in there at the beginning of each month. When the envelope is empty, no more spending on that category, unless you borrow from another (be careful of that approach).

        This can be pretty helpful for people that have a hard time following transactions in their checking account, or keeping a budgeting spreadsheet.

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        The envelopes simplify the tracking process, leaving no room for error. Nothing hides from you because it’s tangible in the envelopes in front of you.

        10. Join a like-minded group

        Making the decision to stick to something like budgeting is difficult. It takes long-term commitment.

        You’re going to feel weak sometimes. And sometimes you may fail. That said, support from others can help strengthen resolve.

        Support can come from a spouse or a friend, but they won’t always have the exact same goal in mind. That’s why it’s a good idea to join a support group that’s likeminded.

        No need to pay here, as there are tons of free communities that fit the bill online.

        For example, reddit has multiple subreddits that deal with budgeting and frugal living. You can follow, subscribe, and get active in those communities.

        This will open your eyes to new tips and strategies, keep your goal fresh on your mind, and help you realize there are others dealing with the same struggles and being successful.

        11. Reward Yourself

        When you set a budget, it’s usually with a large goal in mind. Maybe you want to be debt free, or perhaps you want to see $10,000 in your savings account.

        Whatever the case, the end goal is great, but the end is often far away, making it hard to see the end of the tunnel.

        With that in mind, it’s a good idea to set mini-goals along the way. This helps you still look at the big picture but have something that’s attainable in the short-term to help with momentum.

        But don’t stop there – set rewards for yourself when you reach that small goal. Maybe it’s an extra meal out. Or a new pair of shoes.

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        Whatever the case, this gives you something in the near future to look forward to, which can help with the fatigue that can result in pursuing long-term goals.

        12. Take the Buddhist approach

        You don’t have to be a Buddhist to recognize some of the wisdom in the teachings. One of the tenets of the philosophy involves accepting that we can’t have everything we want. And that’s okay.

        Sometimes you won’t feel good. Sometimes you’ll have cravings. You can’t deny them. But you can recognize them, accept them, and let them pass by. Then you move on.

        Apply this to the times you want to do things that will break your budget. You’re going to have the desire to eat out when you shouldn’t. You might want to stay out and spend too much at happy hour with your work friends.

        The feelings will come. Recognize them, accept them, but let them go.

        13. Set up automatic drafts to savings

        If you wait until you’ve spent all your budgeted money to deposit money into savings, guess what? You probably aren’t going to put any money into savings.

        It’s too easy to see that as extra money and end up using it to treat yourself.

        Instead, set up automatic savings withdrawals. That way, the money is marked and gone before you can even think about it. It becomes a non-issue. It’s no longer “extra.” It’s just savings.

        Conclusion

        Sticking to a budget can be difficult. No one is denying that.

        However, if you can do a few things to set yourself up for success, and put some practices in place to curb impulse buys, then you can (and will!) be successful sticking to your family budget.

        Featured photo credit: rawpixel via unsplash.com

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