Do You Apply The 10% Rule?

Discussion in Savings & Investments Plans started by Onionman • Jul 13, 2015.

  1. Onionman

    OnionmanActive Member

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    There are a lot of personal finance books out there stating that we should all be saving (at least) 10% of our money each month. Obviously that can be quite difficult if you don't have a consistent pay packet but it does ensure you have some discipline in the way you approach your finances.

    Do you apply this same principle?
     
  2. xTinx

    xTinxWell-Known Member

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    I don't follow the 10% rule to be honest. I do know that you have to give back at least 10% of your earnings to the less fortunate (something I strive to achieve). I save money based on future plans. For instance, if I want to travel to another country in the next few months, saving just 10% of my monthly income would not be able to cover my travel expenses. So rather than settle for that rule, I up my target savings so that I have enough left for both emergency and travel.
     
  3. Denis Hard

    Denis HardWell-Known Member

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    The 10% rule isn't for me either. I normally earn most of my money in two or three months and since the what I might earn in the other months will all be spent on groceries and a number of other things I'll need, whenever I earn a good-sized sum I always put away at least 50% just in case . . .
     
  4. Lushlala

    LushlalaWell-Known Member

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    I recently attended a "financial wellness" presentation and they also urged people to start at 10% (if not more) of your total earnings. I thought wow, this won't apply to everyone across the board because we all have different priorities and responsibilities! I mean, I suppose it is possible to a certain extent; but for most, including myself, it may be a little steep. But I'm determined to see if I can do it in the future. I just need my things to settle before I try to do it, because once I start I don't want to fall by the wayside. If anything, I'd much rather steadily increase the amount. It'd be well worth it.
     
  5. Pat

    PatWell-Known Member

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    I think the idea of saving 10% of your income is to have money set aside for an emergency like an illness that would keep you from working for awhile, you will have money to live off. If you lose your job you have some money to help you get by until you get another job. The 10% can also be invested to help you make more money so that you do have an additional source of income, it is not just to set money aside to pay for your next trip or purchase something you have always wanted.
     
  6. GemmaRowlands

    GemmaRowlandsActive Member

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    I don't spend any money that doesn't need to be spent, I have cut right down, and the simple rule that I go by is that I save whatever I have left at the end of the month that I haven't had to use for anything else. I find that sometimes it is a lot more than 10%, but I would rather save it somewhere where the interest is building up rather than leave it in a bank account where it is earning nothing at all. I think that we should just think about how much we're spending, and focus on saving as much as we can, rather than just putting a random figure on it.
     
  7. Lushlala

    LushlalaWell-Known Member

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    I'm just getting back on my feet, and I'm glad to say things are really looking up. My husband and I were just talking about putting money aside every month just the other day. I think it'll work out just over 10% of our earnings, which is great. We're now in the process of deciding what bank to go with and what high interest bank account to choose. I would also like it if it were one of those ones where you can't withdraw money without prior notice, where you have to give advance notice. That way, we'd be less likely to touch it :)
     
  8. rightct

    rightctActive Member

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    My current job allows me to have a consistent pay and am quite fortunate to put aside even 20% most of the time, so I don't follow the 10% rule, but the 20%, haha! Jokes aside, I think everyone should stock a pile of cash for emergencies because life is so unpredictable you wouldn't want to suffer because of it. :)
     
  9. Onionman

    OnionmanActive Member

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    The 10% rule really starts with the emergency fund. Once you have that contingency fund in place you could still have a separate fund for expenditures that you know you are going to have to make (e.g. Christmas presents). Beyond that you're then putting money aside for your future.
     
  10. prose

    proseActive Member

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    Right now my husband and I simply save whatever is left after all of the bills and monthly expenses. We spend very little money on extra unnecessary items, such as going out to eat or things we do not need, unless it is a special occasion. I would like to look for more ways to cut down our monthly expenses further so that the amount we save is consistent. One wat I save is by simply staying out of stores! If I think I need something for a certain recipe or whatever, I simply adjust or make do with what we have. This month I will be keeping track of grocery and gift expenses especially, as the holiday season draws near.
     
  11. Corzhens

    CorzhensWell-Known Member

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    Unless you are rich, I don't think you can follow that 10% rule. There simply is no way to save 10% of your regular income because for sure, your income is already budgeted for your expenses. However, I still try to put in my piggy bank some savings no matter how small like a few hundreds and on some occasions a few thousands. I find it more fulfilling to spend money in sensible things than in saving.
     
  12. thenextGeek

    thenextGeekActive Member

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    I follow the Pareto Principle. I save 80% of my monthly earnings and use the other 20% for my monthly needs. This helps me increase my funds for my investments and business rapidly which in turn results to more profits. I'm not a sucker for expensive things which is why only spending 20% of my hard earned money feels just about right for me.
     
  13. gata montes

    gata montesActive Member

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    I've never been big on the idea of setting fixed amounts of money to save each month - mainly because - doing that can very often have the opposite effect and stop people from saving altogether - particularly as the more disheartened people become at not managing to achieve what they have set out to do - save that set figure each month - generally results in them not saving anything at all.

    Which is why - as what I manage to save tends to vary from month to month and is generally a great deal more during the summer months and considerably less during the winter months - I'm actually quite happy with whatever the amount is - however big or small - as long as I manage to put at least something into my emergency fund each month.
     
  14. Denis Hard

    Denis HardWell-Known Member

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    I agree. Setting rigid percentages might be counter-productive at times. One should save what they can afford to but when they budget but and still find ways to get discounts on items they buy regularly that money should be saved no matter how little it is because in the end all the pennies [if pennies they are] do add up.
     
  15. remnant

    remnantActive Member

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    I follow a simpler hassle free procedure which does not stress me. I usually try to save any coins that I come across. I have had a few false starts and have discovered that low denominational coins which you are not likely to revisit once you keep them in a piggybank. This accumulates over time in a painless way. Whenever you run short of cash, you can borrow from the piggybank and return the cash with interest.
     
  16. biege

    biegeActive Member

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    Cool! I've been following this rule both for investments and charity. I've read about this is a financial literacy book and it's really effective. I'm being rewarded handsomely by just doing this. It's hard to follow at first but if you apply discipline, it pays great.
     
  17. pwarbi

    pwarbiActive Member

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    Times are hard for a lot of people these days, and while I do think that the 10% rule does work, if you are struggling to get by in the first place then you on't be able to save anything never mind 10% so we need to look at other ways maybe of saving what we do have.

    Sites such as this can offer savings and discounts that we don't know about, as well as being able to pick up tips from others and I think that's just as important as saving money out of your paycheck every week or month. I'm lucky enough these days to be able to save 15% of everything I earn, but after struggling with money in the past I still look for the bargains and discounts as well and I think it's important that we don't overlook our bargain hunting capabilities just because our financial situation improves.
     
  18. Ray1

    Ray1Well-Known Member

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    For me 10% is not enough so I am saving 30% right from the beginning of my career and reinvesting it. You know we have no social security in our country for employees other than government workers so if we have to live the same standard what we do during our working period we must save enough for our future. Besides we have to spend lots of monies on marriages and education of our children.
     
  19. Alexandoy

    AlexandoyWell-Known Member

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    I used to work in a bank and my wife is presently working in a big bank. But we cannot practice that 10% of savings and I also believe that only the rich can do that. The amount of money we can save from our paycheck are just coins. However, our expenses include investments like our 2 cars and our home.
     
  20. Ray1

    Ray1Well-Known Member

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    I know people in your country enjoy spending money in a big way but we have to save because conditions in our country demand so. Incidentally I am an engineer with a masters in management working as a marketing professional and my wife a teacher of instrumental music in a degree college.