Quick Take: How much should you save each month?

Try the 50/30/20 method! Set aside 50% of your monthly income for essentials, 30% for wants, and 20% for savings.​

So, you've been thinking about beefing up your savings, huh? Whether you're gearing up for the rainy days, eyeing that dream vacay, or just wanting a cushier cushion for those "just in case" moments, you're in the right place, luv. Let's dive into the art of saving without feeling like you're giving up your daily joys—yes, even your beloved Frappuccino in the morning. 

Why Saving is Crucial for Financial Emergencies and Goals

Imagine sailing smoothly through life when suddenly, a wild financial emergency appears! Or maybe there's a goal you've been eyeing, like that dream home or a well-deserved vacation. This is where your savings come in, swooping in like a superhero to save the day. Having a stash of cash is your first line of defense against life's curveballs and the ladder to reaching those high-up dreams. 

Setting Savings Goals: Short-term vs. Long-term

Now, let's chat about goals. Short-term goals are like your weekend getaways—quick, sweet, and oh-so-satisfying. Think of saving for gadgets, gifts, or even a mini holiday.  

Long-term goals? They're the big leagues—your child's education, a car, a house, or that round-the-world trip. The key is setting both types of goals to keep you motivated and moving forward.  

Remember, every little saving milestone gets you one step closer to the summit of your financial goals. 

Effective Saving Strategies

1. Pay Yourself First: This is the golden rule of saving: On salary days, before you pay your bills, buy groceries, or treat yourself, set aside a portion of your income for your savings, luv. Think of it as paying Future You for all the hard work Present You is doing

   PRO TIP: Create a Salary Stash for all your excess salary money (for when you don’t know where to spend it on, why not Stash it and earn interest as it sleeps?)

2. Set Automated Transfers: In the age of digital banking, automated transfers are your best friend (Well, of course, aside from us, luvs!). Set up a system where a portion of your income automatically goes into your savings account each payday. It's like setting up a surprise party for yourself every month—surprise, you saved!
3. Cut Unnecessary Expenses: We all have those little indulgences that add up (looking at you, daily milk tea). Take a hard look at your spending habits and identify areas where you can cut back. It's not about living like a hermit but finding a balance that allows you to enjoy life while growing your savings. 

High-Yield Savings Accounts

Not all savings accounts wear capes, but high-yield ones sure do. These accounts offer higher interest rates than your typical savings account, meaning your money grows faster without you lifting a finger. A good example of a high-yield savings account is Tonik Stashes. With a Solo Stash, you can save for any reason you want, and earn as much as 4% interest per annum. Plus, it gets even better when you open a Group Stash with your friends or family because the interest rate jumps to 4.5% p.a.! 

Challenges to Saving and How to Overcome Them

We get it, saving isn't always smooth sailing, luv. Life happens, sales happen… and sometimes, saving feels like a chore. Here are just some of the most common saving challenge that you might encounter: 

1. Unexpected expenses: Life loves throwing curveballs, and they often come in the form of unexpected expenses—be it a sudden home repair, a medical emergency, or an impromptu family gathering. These surprises can quickly drain the savings you've worked hard to build. To overcome these unexpected expenses, you can:
   • Start by building an emergency fund separate from your main savings. Aim for an amount that can cover at least three to six months of living expenses. This fund acts as a financial buffer that keeps you afloat during unexpected events, without derailing your long-term savings goals.
   • Consider getting insurance coverage for health, life, and property. Insurance can help mitigate the financial impact of significant unexpected expenses.
   • Look for a way to build credit. The bigger your credit with a trusted bank, the better safety net you have when something unexpected comes up. One good way to build credit is throughTonik Credit Builder Loan. Application is fast and easy with a loan amount up to ₱20,000. Plus, self-employed individuals are welcome to apply! Learn more about our Credit Builder in this guide. 
2. High-Interest Debt: Credit card debt, loans, and other forms of high-interest debt can be a massive barrier to saving. Interest alone can eat up a significant portion of your income, leaving less to save or spend on other necessities. To overcome high-interest debt, you can:
   • Apply the debt snowball method. Start by paying off the smallest debts first while making minimum payments on the rest. As each debt is paid off, use the freed-up funds to tackle the next smallest debt, and so on. This method can help build momentum and provide psychological wins that motivate you to keep going.
   • Consolidate your debts. If you're juggling multiple debts with high interest, consider a consolidation loan. This approach combines all your debts into one loan with a lower interest rate, making payments more manageable and freeing up more money for savings. 
3. Lifestyle Inflation: As your income increases, so does the temptation to upgrade your lifestyle. While treating yourself is not inherently bad, lifestyle inflation can quickly absorb extra income that could otherwise go into savings. To avoid the negative impact of lifestyle inflation, it’s best that you do the following:
   • Be conscious about your spending habits. It's okay to splurge occasionally but make those decisions deliberately rather than impulsively. Ask yourself if each purchase aligns with your long-term goals.
   • Make saving the first priority when you receive your income. Automating transfers to your savings account ensures you save before you have the chance to spend, effectively curbing lifestyle inflation. 

Each of these challenges comes with its own set of strategies for overcoming them, ensuring that your journey to financial freedom remains on course, no matter what life throws your way. By tackling these obstacles head-on, you're not just saving money; you're investing in a future where financial worries take a backseat, allowing you to enjoy the beautiful journey of life to its fullest. 

Make Saving a Lifelong Habit

Alright, luv, here's the deal: making saving a part of your lifestyle is one of the best decisions you'll ever make. It's not just about stashing away cash for the sake of it. It's about building a future where you're in control. With the right goals, strategies, and a bit of discipline, you'll find that growing your savings is not only achievable but also incredibly rewarding.

So, ready to turn saving from a daunting task into an effortless art? Embrace these tips, start small, and gradually, you'll find yourself building a robust financial cushion that can support you through thick and thin. Here's to saving smart, living well, and loving every minute of it. Cheers, luv!