Saving isn’t easy. Life gets in the way. From travelling to be part of a friend’s wedding and paying for a loved one’s birthday surprise, to digging deep to shell out to fix your car, there’s always something that turns up just in time to lay claim to the lion’s share of each one of our 12 annual pay packets. And if you’re injured, you may not be able to work at all, meaning extra hardship (speak to a personal injury lawyer if you’ve been affected). However, save we must. Because life isn’t about working ourselves into an early demise with nothing but taxes and expenses to show for the dash between the two dates on our grave stone. Life is for living. But only if you have the money to live. So, what can we do?
The 50 / 30 / 20 rule
Some of you will read this and wonder what planet this rule is from, others will see no issue with it. If you’re from the first category of earners, don’t worry, just get as close to 20% as you can. 20% of what, you ask? OK, here’s how the 50 / 30 / 20 rule works.
First, you should allocate 50% of your earnings towards bills. Now, this is where some people will be thinking that if only 50% of their expenditure went on bills, they wouldn’t need to save. But stick with me. Next, allocate 30% of your monthly pay towards necessary things like food. If you’re spending over 30% of your monthly wage on food and entertainment, you may need to consider your options. Lastly, 20% of your income should go straight into a savings account. I know, I know. That’s difficult to do for many people. But here’s the thing. The 50 / 30 / 20 rule doesn’t have to be how you start to save today. It can be your reason to sit with your finances and figure out how to get as close to these numbers as possible in the coming months.
Go over your expenses – look for payments you can cancel
The internet is awash with stories of people who did not cancel monthly payments upon concluding their business with a particular firm (e.g. car payments, gym payments) only to find months later that the payments had never stopped. Although this sounds like a horror story that most people do not need to check for (because we know exactly where our money is going each month, thank you very much), there may be other reasons to check your outgoings for potential savings…
…streaming services are a drain you could probably do without. With rare exceptions of global hits, must-see TV shows and movies are few and far between, with many of us paying for streaming services that we don’t use. You could also be paying for club memberships that you don’t make use of, or paying insurance premiums for items like old phones. Double check now for instant savings at the click of a button.