How much should one be saving from salary/pay check?
Is it smarter to keep different accounts for different goals (like separate account for long-term, one for travel, one for retirement, emergency fund etc)?
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At least 10% — i do not have separate accounts but i do have the money ear mark with in these accounts for the different goals!!!
80% (If you don’t have a house)
50% (If you already have a house)
In my experience as a banker, it is wiser to keep separate accounts for separate goals– because the minute your “long term” savings gets mixed up with your “holiday spending” goals, you’re going to rip into the whole thing (how much is for long term, vs. short?).
What you put aside for savings will depend on your expenses, but the advice I always give my clients is this: it doesn’t matter if it’s $20 a week, what matters is that 1) you pay yourself first, 2) you don’t skip– EVER, and 3) you leave it there. If you put $20 in, then you don’t put it in for three weeks and then “borrow” $10 back. Consider that money untouchable, inaccessible and offlimits. If you borrow, it will never go back. Once you’ve gotten comfortable with the savings going into the account (so you don’t really notice– you’ve adapted your spending pattern to it)– you then up the ante a little bit, even just five dollars each time is enough.
Don’t forget to set up a “treats” account. I put in ten dollars a week and forget about it. Then, if something comes up that I really want to do that’s out of the normal spending range for me, if I spend out of “treats”, I don’t feel guilty… and I still get to do it!
Start with how much you need to upkeep your current lifestyle and ask whether you can change the style to allow more on savings.
Second, do you like to change job to ge more pay?
Third, keep savings in two accounts, one is for the account that may be needed at one time and another for long-term, not likely to touch unless you are thinking of uplifting you lifestyle. (Too many accounts involve too much paperwork.)
You should be setting aside between 15-20% into a savings. I have 4 different accounts for my saving, emergency fund..etc that way I can tell what the balances are.
i would take anywhere form 3 to 5% out of each check. you won’t notice the diffrence your short each check but over time it will reeeaally add up. that’s what i’m doing now. i started last jan and i already have 2800.00 saved. my work offers great incentives to help us save up for retirement. i’m only 26 by the time i retire who knows how much i’ll have when i add more percentages to it !!
Set aside 10% for retirement if you are still in your 20′s; a larger percentage would be better if you’re starting later.
Also build up an emergency fund equal to at least 3 months pay; if you are self-employed 6 months. After that’s in place, you could add more to your retirement or travel accounts.
I think the separate accounts for different purposes is a great idea.
I would put 10 to 15% into retirement, and 10% in savings/emergency fund.
Check out Dave’s website for advice…
http://www.daveramsey.com
Another good site to get you motivated:http://www.feedthepig.org/