We all know that we’re meant to save a portion of our wages as a contingency. Still, knowing precisely what percentage to put aside depends on many variables.
Likewise, you might be concerned about how long a personal check takes to clear if you need emergency access to the funds.
But when it comes to knowing what percentage of each paycheck to save, there isn’t a universal answer. It varies by individual and you will clearly have more capacity to save if you earn a higher salary. Sometimes you can also take steps to reduce your financial obligations, though that isn’t always a realistic option!
As a rough idea, you should save around 20% of your monthly income — but as we’ll discover, the best strategy is to set out your savings goals before you start tucking away a chunk of your income.
Additionally, while putting savings strategies into practice, you may wonder how long a domestic wire transfer takes to deposit savings funds. It’s usually about 24 hours, so you’re not looking at a significant delay before your money hits your savings account.
The Flaw In The 50/30/20 Savings Rule
The 50/30/20 rule is often seen as the target budget.
In short, this rule means that you spend 50% on essentials, 30% on your nice-to-haves, and save the remaining 20%.
However, the difficulty in planning out savings is that your strategy for managing your money may have to fluctuate to meet various expenses. It’s rarely possible to achieve identical spending behaviors every month, so it’s best to choose a strategy that fits your particular needs.
For example, if you have credit card debts, we’re never going to advocate putting 20% of your income into a savings account!
Don’t feel pressured to follow an arbitrary, generic savings structure as if it will meet your exact budget. The right solutions are the custom ones that support you and your unique lifestyle aspirations.
Creating A Savings Strategy
Instead, if you’re wondering what percentage of your paycheck you should save, start by assessing your priorities:
- How much do you want to save, and over what period?
- Do you expect a change in your earnings or expenses?
- Are you saving for a specific purchase or reason?
- How much do you need to spend each month to cover essential expenses?
It’s also important to look at savings products, such as high yield interest accounts, to work out the best option to ensure your cash keeps working hard (even if you’re taking it easy!).
Deciding Where To Stash Your Savings
So, you’ve got a figure in mind you’d like to shoot for and have looked through your income and expenses to make sure it’s an achievable plan.
Next, it’s vital that you put your savings somewhere different from your everyday checking account.
With the strongest willpower in the world, if there is a healthy balance sitting in your account, the temptation to spend could get the best of most people. It’s wise to avoid the risk and keep your savings separate.
It’s also far easier to monitor your progress towards a savings goal if you have a specific account!
High Yield Savings Account Options
What sort of savings account should you go for?
Small savings values probably won’t amass thousands in interest (especially when interest rates are low).
Still, there’s little harm in bumping up your savings balance in an account with decent returns! Again, it’s a personal choice.
However, if you are worried about having instant access to savings in a crisis, you’ll need to check out the withdrawal options. This will help to ensure you don’t find yourself in a tight spot without any funds.
The Cashero High Yield Savings Account is an excellent option if you want to give your cash the best chance to grow.
Interest rates are an inflation-beating 2 to 5% APY, and there’s no minimum balance. This allows you to deposit any value you like to kick-start your savings efforts.
The other big bonus is that you can withdraw your funds whenever you need to, without a penalty — we’re not in the business of charging you fees to access your own cash!
Take a look around, compare interest rates, and be mindful of monthly charges. With a good strategy in place, you’ll feel confident in knowing that your savings (whether that’s 2% or 20%) are growing steadily and helping you reach your end target.
As of the date of publication, the information contained on this page is deemed to be factually accurate for all terms of conditions, features, and fees. Changes made to Cashero’s terms of conditions, features, or fees after the publication of this content may not be accounted for.
The Cashero App is now available for download in both the Apple App Store and Google Play Store, though not all features are currently functional. Cashero has not yet officially launched.