How Much to Save Each Paycheck?
Every one knows how much to save per paycheck, but how many people actually know how much to save per month? This is the true fact about saving money for the long term.
If you can save a little bit here and there, then you will be well on your way to financial freedom. Here is a guide on how much to save per paycheck.
To figure out how much to save per paycheck, first figure out how much you make in a typical month. Add up your annual wages.
This will give you your take home pay. Next, figure out your expenses. If you spend more than you make, then you will have to save more money per month.
So, if you have a car payment, a cable bill, or even some school fees, then you must factor these things into your expenses.
Once you know how much to save per paycheck, figure out what type of expenses are considered “luxuries.” Are there certain things that you absolutely cannot live without? Maybe a pet or small child would be a luxury.
If you want to save more, then learn how to live without them. Or, start saving towards those “luxuries” right now!
Another thing you should factor in when figuring out how much to save per paycheck is your net income after taxes.
This will show you how much of your salary is going toward actual expenses versus your salary. This can be a very useful tool when it comes to planning your budget.
Also, this may help you determine how much to save per week because you will see how much you spend on entertainment.
The more money you spend on things that are not actually required, the more money you will be taking out of your pocket.
If you are wondering how much to save per paycheck, ask yourself how much you would spend if you were not earning any.
For instance, if you work as a cashier and you have a boss that makes all of the decisions, do you really think he will leave you alone to figure out how much to save per paycheck? Probably not. So, factor this into your calculations as well.
Once you have figured out how much to save per paycheck, compare it to how much your actual expenses are per week and then apply that amount to your net income.
If you are curious about how much to save per paycheck but do not have any idea how to begin your research, the easiest way to go about it is to do your research online.
There are many sites that will help you with your finances and give advice on saving for retirement, as well as other areas.
If you are still not sure how much to save per paycheck, consider how much you would spend if you were not working at all.
Now, add up your net salary and deduct the amount you would spend if you were not working. The number that you end up with is the amount you need to set aside to retire early, if you want to.
That number is how much to save per paycheck.
A good rule of thumb to use when figuring out how much to save per paycheck is to assume you will live your retirement age.
For most people, that age is sixty. For younger workers, it is likely you will live much longer. Therefore, the amount you set aside should be equal to two thirds of your expected lifetime salary.
When you are figuring out how much to save per paycheck, it is important to remember not to put too much money away.
In other words, you do not want to go overboard and live above your means. You need to save enough to provide a comfortable living while you are still working.
Remember to set aside enough to provide a nice retirement home for your family once you are gone. That amount should be set aside each week.