I come from a banking background, and i can rate myself as fairly good with numbers. For years i have been wondering, what is the ideal percentage that one has to save which can take care of the future by building a good enough corpus over years, and at the meanwhile the current needs are met as well
There have been times, when i have oversaved, and stretched my limits, leading to a hand to mouth existence, or at times, when i have saved little, and went on a spending spree, and i can say both are unhealthy and immature behaviours, which can lead to problems sooner or later........
Thus came the plan of charting out a financial planning strategy, which would be the same throughout the year, and would take care of my future investments as well as liquid fund which needs to be used for daily needs, as well as an emergency fund....
Calculation goes as:
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For Married:
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Make a calculation of the compulsory outflows from the salary, like
1) EMI
2) Rent
3) Electricity bills, mobile
4) Household expense
Once you are done with the calculation for this, add 5000rs more to it to take care of unpredictable needs or splurge bouts(When you intend to save, restrict on your splurges)
Savings/Investments: After taking care of this, the ideal percentage of saving would be 10% of your income in SIPs of top notch funds, like Reliance, HDFC, HSBC, wherin you are assured of good returns.
Emergency Fund: And another 10% should always be available in liquid cash in your bank account, and this should not be touched until absolutely necessary.
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For Singles:
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Make a calculation of the compulsory outflows from the salary, like
1) Amount to be contributed towards household expense
2) Canteen bills, treats, attire
when you are single, you can spend a lot as well as save a lot, the choice is yours, but the correct approach is to find a balance, so that you enjoy your social life as well as save for future.
And add only extra 1000rs, to take care of your splurges, and urgency needs, cos when your single, most of us donot have too much of liabilities like married counterparts of managing emi as well as rent ;)
Saving/Investments: After taking care of this, the ideal percentage of saving would be 20% of your income in SIPs of top notch funds, like Reliance, HDFC, HSBC, wherin you are assured of good returns.
Emergency fund: And another 10% should always be available in liquid cash in your bank account, and this should not be touched until absolutely necessary.
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One another important point, which i intend to state and which is common for both groups is, please do invest in PFs, provided by your firms, as it gives you 8% interest, and on a compounding basis, and has a lockin period, which forcefully makes us save money.
Investing by itself is a very important task, and this post just gives you a brief idea of the ideal saving percentage. Some may find this saving percentage easily achievable and some might find it difficult, please fine tune it as per your salary slab, but remember the point is about saving for future :D
