Here’s How Much And How Long You Should Save Up For Anything3 min. read
There’s been a lot of savings trends going on in the last few years.
There’s the weekly savings challenge and the crowd favorites: P20 and P50 daily savings challenges, as seen with accumulated bundles of money.
These are all raved about because a lot of people, and maybe even you, have attested to just how effective it is to get you to save money.
And if you haven’t started yet, you can do a quick read on our Blog to get you started. Then there are some people that might still need more motivation, or a tangible goal to really get on board.
What are you trying to save up for? Do you know how much that costs, and when you can finally get it?
A goal every month
A solid savings plan that’s also been tried and tested is the consistent setting aside of 10% from your monthly income, with a set goal amount, and timeline.
We’ve come up with five of the most common savings goals right now. Maybe you’re planning to travel, upgrade to a new phone, or get a car. Here’s how long you have to save up for each one if you consistently save up 10% off your earnings every month.
It’s also worth noting that the average annual salary growth in the country is now at 6.2%, according to the Mercer Compensation Planning for 2018 report. So, expect to have more money in your savings account.
1. House and lot
No matter your current salary, you might want to consider saving up for your very own home as early as now.
The average house and lot is valued at P1.5 million and comes with a 20% down payment, or in this case, P300,000—which you have to pay in full. You can then apply for a home loan with the bank you prefer, and set a loan tenure according to your repayment capability.
There are also home loans through Pag-IBIG and SSS you can use if you have made enough contributions
2. Your very own car
It’s never too early to dream big, especially if it’s made attainable through a proper savings plan.
The car used in this example is the Toyota Vios 1.3 E AT CVT, which costs around P841,000. The down payment is usually at 15% to 20%.
In this illustration, the down payment is pegged at around P168,000. You can then pay off the rest with an auto loan, at a maximum of five years.
3. A high-end laptop
The Dell XPS 13 is currently one of the most expensive and highly coveted laptops. Its price range is around P95,000.
If your livelihood depends on having the most reliable laptop, you can save up for it within a year and a half, for those that earn around P50,000 per month.
4. A high-end phone
iPhone X is much-talked about for good reason. It’s currently priced at around P64,000 and an upgrade for you means a year and a half of 10% monthly savings.
But who are we kidding, a brand new, better and sleeker phone is always released every few months and you’ll forget about iPhone X by then. So following this method, you can just set an amount and timeline as to when you can buy a new one for yourself.
5. A round-trip ticket to your dream destination
We just picked London to illustrate, but there are many emerging destinations around the world you might end up going to.
To give you an example, the average roundtrip ticket we got for London is around P45,000, booked six months ahead with one-month travel time.
Considering travel budget and Visa preparation that comes with it, this should motivate you to work even harder. You can even find a side job or ways to earn extra money to help jumpstart your travel goals.
Financial advisers would always reiterate that we save money early on. Those that are currently at a minimum or entry-level salary bracket should not be disheartened, because it’s only a matter of setting a goal and committing to your own savings timeline.