So you just started work. How much of your salary should you save?
There is no hard and fast rule.
While the simple guideline is 10-20% of your salary, it really depends on how fast you’d like to reach financial freedom. To speed things up, you might want to add in another 5-15% more to attain your goals in a shorter time.
Some experts suggest the 50/30/20 rule.
That’s 50% of your monthly budget allocated to essential items such as housing, food and transport; 30% towards lifestyle choices; and the remaining 20% towards savings or investments. If you are able to save more, gradually increase the amount of your savings until you feel comfortable.
Deciding what’s essential or a lifestyle choice can be confusing at times, right? For example, is food considered an essential or a lifestyle choice?