Did you know only 15% of Americans have enough savings to keep their heads above water for six months if they lost their jobs? This is mainly due to the lack of education on how to save money. People don’t know they should put aside money for saving each paycheck.
If you are one of those people who isn’t sure how to save for emergencies, this article is for you. Keep reading to learn more.
Wondering How Much To Save From a Paycheck?
A good emergency fund is a must for everyone. It can help you to pay for anything that comes your way. You should save at least 20% of your earnings each month based on the 50-30-20 budgeting rule. That will give you a nice head start and make it easier to build up an emergency fund in the future.
What Is the 50-30-20 Budget Rule?
The 50-30-20 budgeting rule states that you should spend 50% of your income on necessities. Then you spend 30% on wants and 20% on savings.
This means that you should spend about half of your income on things you need to survive. You should spend about 30% of your income on things like entertainment and clothes. And the final 20% should be saved for emergencies or other needs that may arise in the future.
3 Tips on How to Save Money
Wondering about other ways to save money? These three tips are extremely helpful:
Sell Unused Items
Selling personal items to save more money is not a new idea. It has been around for centuries and it still works today.
There are many ways to sell personal items such as books, clothes, jewelry, accessories, furniture, and more. You can also sell them on an auction website or by posting ads in the classified section of your local newspaper. You can also use websites that specialize in selling used goods such as eBay or Craigslist.
Get Another Income Stream
More and more Americans are holding two or three jobs. While it seems daunting, it is the only way many people can survive. If possible, having another stream of income is a great way to save more money faster.
Interested in statistics on retail workers? See here for more information on the average hours worked.
Reorganize Your Budget
When you are trying to save money, it is important to start by looking at your budget. You can reorganize your budget so that you can save more money.
Organizing your budget can be an overwhelming task. It requires you to think about where you spend the most of your money and how much you are spending in each area.
Learn More About Saving Money
Now you have a better understanding of how much to save from each paycheck to create an emergency fund. It can be difficult to set up and follow a budget, but it pays off in the long run! Not only will you have funds for an emergency, but you’ll learn how to save for big purchases.
If you enjoyed this article, check out our blog for more financial tips.