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

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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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    Photo credit: Source

    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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        Last Updated on January 5, 2022

        33 Painless Ways to Save Money Now

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        33 Painless Ways to Save Money Now

        In a difficult economy, most of us are looking for ways to put more money in our pockets, but we don’t want to feel like misers. We don’t want to drastically alter our lifestyles either. We want it fast and we want it easy. Small savings can add up and big savings can feel like winning the lottery, just without all of the taxes.

        Some easy ways to save money:

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        1. Online rebate sites. Many online sites offer cash back rebates and online coupons as well. MrRebates and Ebates are two I like, but there are many others.
        2. Sign up for customer rewards. Many of your favorite stores offer customer rewards on products you already buy. Take advantage.
        3. Switch to compact fluorescent bulbs. The extra cost up front is worth the energy savings later on.
        4. Turn off power strips and electronic devices when not in use.
        5. Buy a programmable thermostat. Set it to lower the heat or raise the AC when you’re not home.
        6. Make coffee at home. Those lattes and caramel macchiatos add up to quite a bit of dough over the year.
        7. Switch banks. Shop around for better interest rates, lower fees and better customer perks. Don’t forget to look for free online banking and ease of depositing and withdrawing money.
        8. Clip coupons: Saving a couple dollars here and there can start to add up. As long as you’re going to buy the products anyway, why not save money?
        9. Pack your lunch. Bring your lunch to work with you a few days a week, rather than buy it.
        10. Eat at home. We’re busier than ever, but cooking meals at home is healthier and much cheaper than take-out or going out. Plus, with all of the freezer and pre-made options, it’s almost as fast as drive-thru.
        11. Have leftovers night. Save your leftovers from a few meals and have a “leftover dinner.” It’s a free meal!
        12. Buy store brands: Many generic or store brands are actually just as good as name brands and considerably cheaper.
        13. Ditch bottled water. Drink tap water if it’s good quality, buy a filter if it’s not. Get 
            a reusable water bottle and refill it.
          • Avoid vending machines: The items are usually over-priced.
          • Take in a matinee. Afternoon movie showings are cheaper than evening times.
          • Re-examine your cable bill. Cancel extra cable or satellite channels you don’t watch. Watch the “on demand” movie purchases too.
          • Use online bill pay. Most banks offer free online bill paying. Save on stamps and checks, and avoid late fees by automating bill payment.
          • Buy frequently used items in bulk. You get a lower per item price and eliminate extra trips to the store later on.
          • Fully utilize the library. Borrowing books is much cheaper than buying them, but in addition to books, most local libraries now lend movies and games.
          • Cancel magazine/newspaper subscriptions: Re-evaluate your subscriptions. Cancel those you don’t read and consider reading some of the other publications online.
          • Get rid of your land-line. Do you really need a land-line anymore if everyone in the family has a cell phone? Alternatively, look into using VOIP or getting a cheaper plan.
          • Better fuel efficiency. Check the air pressure in your tires, keep up with proper auto maintenance, and slow down. Driving even 5MPH slower will result in better fuel mileage.
          • Increase your deductibles. Increasing the insurance deductibles on your homeowners and auto insurance policies lowers premiums significantly. Just make sure you choose a deductible that you can afford should an emergency happen.
          • Choose lunch over dinner. If you do want to dine out occasionally, go at lunchtime rather than dinnertime. Lunch prices are usually cheaper.
          • Buy used:  Whether it’s something small like a vintage dress or a video game or something big like a car or furniture, consider buying it used. You can often get “nearly new” for a fraction of the cost.
          • Stick to the list. Make a list before you go shopping and don’t buy anything that’s not on the list unless it’s a once in a lifetime, killer deal.
          • Tame the impulse. Use a self-enforced waiting period whenever you’re tempted to make an unplanned purchase. Wait for a week and see if you still want the item.
          • Don’t be afraid to ask. Ask to have fees waived, ask for a discount, ask for a lower interest rate on your credit card.
          • Repair rather than replace. You can find directions on how to fix almost anything on the internet. Do your homework, and then bring out your inner handyman.
          • Trade with your neighbors. Borrow tools or equipment that you use infrequently and swap things like babysitting with your neighbors.
          • Swap online. Use sites like PaperBack Swap to trade books, music, and movies with others online. Also, look for local community sites like Freecycle where people give away items they no longer need.
          • Cut back on the meat. Try eating a one or two meatless meals every week or cut back on the meat portions. Meat is usually the most expensive part of the meal.
          • Comparison shop: Get in the habit of checking prices before you buy. See if you can get a better price at another store or look online.

          Remember that saving money is not about being cheap or stingy; it’s about putting money into your bank account rather than giving it to someone else. There are many ways to save money, some you’ve never thought of, and some that won’t appeal or apply to you. Just pick a few of the ideas that sound doable and watch the savings add up. Save big, save small, but save wherever you can.

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          Featured photo credit: Damir Spanic via unsplash.com

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