There is not an ideal number of how much you should save as your savings money depends on several factors and one’s financial situation. However, there is still a need for each and everyone of us to save a certain amount of money to be ready for the future.
Why do you need to save money?
When it comes to saving, there would be more than one reason for you to consider saving from now. Some common reasons include:
1/ Potential risks in life: These are things that cannot be expected or foreseen, such as: sickness, accidents, etc. When these potential risks occur without financial support, you will easily face several difficulties.
2/ Potential plans in the future: You might be having future business plans such as opening a start-up business, buying a house for investment purposes, etc. As business plans would always need a certain amount of capital in the beginning, having a savings amount will help you to execute these future plans more easily.
3/ Be financially independent: Having your own savings means you are more likely to be financially independent instead of having to depend on your family, spouse, etc.
Each of us will have different reasons to save money instead of spending all of our monthly income. Saving money will help you to maintain your daily life and build a strong financial foundation for the future.
How much should you save before you are 30?
Your savings amount will entirely depend on your financial capability and your monthly income. However, to make sure you effectively save a certain amount of money every month, you can apply the following formula for your monthly income. In particular, you should break your income down into 6 main accounts, based on the JARS System of money management, including:
– Necessities account – 55%
– Savings account – 10%
– Education account – 5%
– Financial freedom account – 10%
– Entertainment account – 10%
– Charity account – 10%
As you can see, from this formula, you should save 10% of your income per month. When you have a certain standard, you can easily calculate how much you should be able to save before you are 30. For instance, you are currently 26 years of age and your monthly income is 20.000.000 VND/month. If you apply the above formula, you should be able to save 96 millions VND when you are 30 years of age. If you can save this much money, you can easily earn interest if you open a savings account or invest in your start-up business.
What is the most effective method of savings?
There are currently several savings methods of saving for you to choose from. Two of the most common savings methods are known to be independent savings and saving with a third party. With independent savings, you would start a plan on your own and execute your plan by stacking cash in your safe. On the other hand, opening a savings account at a bank or buying insurance are some examples of saving with a third party.
At the moment, the majority of banks offer several savings products for you to choose from. However, online savings account is the product that can help you plan and manage your savings more effectively. Timo is currently one of the banks in the marketing that also provides this savings product. Find out more about Timo Term Deposit with attractive interest rates here.
From 5th July 2019, foreign nationals are no longer eligible for Goal Save Accounts as stated in Circular no. 48/2018/TT-NHNN. For Term Deposit Accounts, foreigners with a valid document proving residential status in Vietnam with at least 6 months validity will be eligible to open Term Deposit Accounts with a Term NOT greater than the remaining of its validity. Existing Term Deposits opened before 5th July 2019 will be continued until its maturity.