In case of unforeseen situations or expenses, you should have your own financial cushion. These savings will help you be prepared for various expenses that may not fit into your monthly budget.
Economist Pavel Sheremeta, in an interview with RBC-Ukraine (Styler project), said how much you need to save from your income.
How much should you save?
First of all, the expert notes that it is never too late to start saving money. The only question is to what extent to do this.
“This question depends on what your income is and what your expenses are. For myself, I made the following conclusion: I would say that 15-30% of income should be saved. We need to develop internal discipline that this is an emergency reserve,” advises Sheremeta. .
At the same time, if your income allows you to save more, do so. And if life requires more expenses, treat this with understanding. But then you need to adjust the state of your financial cushion, because there were no savings for a certain time.
The economist also adds that lending from banks is something that could be postponed.
“You need to understand that a loan is negative savings, because you owe the bank. Be careful with this. Look at your ability to pay back these loans. I appreciate people who live by the principle of not taking out loans at all,” he says.
How much do they save in the world and Ukraine?
According to the expert, the normal level of savings in the world is 25-30%. In Ukraine it is 13%, and in China – 45%.
“I had a Korean friend with three diplomas of the best education. One Friday my friends and I decided to have coffee. He says: «I’m not going.» Although you can see in his eyes that he wants (laughs). Why? Because he exhausted his coffee budget this week. This is the culture,” says Pavel.