Most people are familiar with the “10% Savings Rule”. This is the basic rule of thumb that everyone should save 10 percent of their income, at all times.
This is an excellent guideline, but it can be improved upon.
First, remember that it’s 10% of your income, not a static number that never changes. If you get a pay raise, your “10%” should be adjusted accordingly. The same goes if you receive a bonus or other windfall.
Now, once you’ve become comfortable and committed to saving 10%, and you are able to meet your other financial obligations, consider bumping your savings amount up to 15% of your income. Obviously, your savings will grow faster and you’ll enjoy the greater peace of mind as you watch your savings grow.
Comfortable with 15%? Maybe it’s time to save 20%…