I’m Ready to Save But How Much?

In my previous post, I wrote about changing our financial mindset to “pay yourself first“. Why? Because it will ensure our savings grew as income increases.

The next question one should ask, “how much do I need to save?”. What is the sufficient amount? Is there an easy method and can be applied by anyone? Well, here is a strategy I adopted from David Bach “The Automatic Millionaire“. The first hour you work in a day, you apply the “pay yourself first” concept.

Below is an example. Assuming your:

Note: current income, the number of working days in a month and number of working hours in a day varies from one person to another. Example, some work 26 days a month and there are those work 12 hours a day. 

Firstly, calculate your daily income:

Next, calculate your hourly income:

Now, let’s calculate how much you should be saving monthly:

How simple was that to calculate? Now, use your calculator and calculate the amount you need to save monthly based on the above example. Are you saving enough? Is it more or less than the amount you have calculated? If more, good for you. If less, don’t worry. In my next blog post, I will share how to achieve the desired savings amount.