Carl Richards, a financial planner and author of “The One-Page Financial Plan: A Simple Way to Be Smart About Your Money,” is known for boiling down essential money advice into a simple sketch that could fit on a napkin.
In the one above, he tackles a common myth: That there’s a specific percentage of your income, or a specific number, that you should save. The reality is that because everyone’s situation is different, your savings goals depend only on yourself.
When it comes to saving money, people get hung up on the number.
Should you save 15% of your paycheck? Five per cent? Twenty per cent? The number matters less than you might think.
Start with saving as much as you reasonably can. Your definition of reasonable may not match your neighbour’s and that’s O.K.
Instead of stressing about a random percentage, focus on what you can save given your commitments. What’s reasonable in your thirties probably wasn’t reasonable in your twenties.
Giving yourself permission to save reasonably means continuing to save for the future without denying yourself the things that keep you healthy, happy, and sane today.