Sure, saving money is important — but how much should you save? And where should that money go? It can be challenging to know exactly how much to save from your paycheck to look after your monthly expenses and long-term financial goals. So, while every situation is different, let’s go over what your payday routine can look like, including how much to save from your paycheck and where to put it.
How much to save from your paycheck.
It’s a good idea to set some money aside for retirement and any big life events or purchases headed your way in the future. As for how much you should save, some experts advise following the 10% savings rule, while others say anywhere between 20-50% is ideal. But regardless of what the internet may tell you, the details of your own unique payday routine aren’t so cut and dry.
How much money you save from your paycheck depends on a few factors, but it’s more about how you spend than how much money you make.
Think about it:
First of all, what are your savings goals? Maybe you want to build an emergency fund or plan a vacation; getting clear on your goals will help determine exactly how much you need and how long it will take to fulfill them.
Plus, whether you’re saving for something specific or just in case, your current debt load, financial goals, and lifestyle also play a role in the amount of savings you should set aside.
So, when it comes to your payday routine, where should you start?
If you’re new to budgeting, try dividing up your paycheck into three chunks: funds for what you need, what you want, and savings or investments. This is often known as the 50-30-20 rule, where 50% of your paycheck goes toward your regular expenses (like groceries and bills), 30% is for nice-to-haves (like a night out at a restaurant or a new pair of shoes), and 20% can be invested.
To make it easy, you can even set up recurring transfers to build your savings automatically over time. In just a few clicks, you can ensure that a piece of every paycheck will get moved to your savings — no matter what kind of account you have.
Where to put your savings.
Ultimately, it’s your payday routine. That means you get to decide where your deposits go. And at Vancity, your money helps fund local, environmental, and social initiatives when you’re not using it — so you can feel even better about growing your savings with us. Plus, there’s never been a better time to put your money where your values are. Right now, join Vancity and get $300¹.
Whether you already bank with Vancity or you’re a soon-to-be member, there are plenty of account options for your future savings, including our:
- Promotional Jumpstart™ HISA: Earn more with this high interest savings account. There’s no monthly fee or minimum balance on our limited time offer².
- Term deposits: If you’re looking to invest your savings for the short- or medium-term, our term deposits or GICs offer great rates and guaranteed returns.
- Plan 24® Savings Plus: If you’re under 24 or over 55, enjoy free Everyday Transactions³ with this savings account.
Let’s get started.
Ready to start saving? Connect with us to find the best savings account for you (and one that helps your community, too). Whether you’re seeking short-term savings or long-term investing, at Vancity, you have plenty of options that will benefit you, your community, and the planet.
And remember — even if you can only save a little at a time, when it comes to savings, something is always better than nothing.
² Interest is calculated on closing daily balance in an Account and paid at month-end. The interest is an annual interest rate. Interest is earned in the currency of the account. Promotional interest rate will not be earned on pre-existing Vancity accounts. Terms and Conditions and transaction service limitations may apply. Refer to Terms and Conditions for details. Offer ends February 28th, 2023.
Jumpstart™ High Interest Savings Account is a trademark of Vancouver City Savings Credit Union.
® Trademark of Interac Inc. Used under license.
³ Everyday transactions are all of these:
Everyday Cheque and Preauthorized Payment Transactions are cheque transactions and preauthorized payments (PADs) from Vancity Accounts.
Everyday Online and Mobile Transactions are bill payments, cheque deposit using Vancity Mobile Deposit™, transfers from Vancity Accounts made online using a computer, mobile phone, Mobile Device or using Vancity’s automated Telephone Banking service.
Everyday In-Person Transactions are Account withdrawals, bill payments, transfers to or from Vancity Accounts conducted person-to-person, over the phone with our branch staff or Member Service Centre staff.
Everyday Debit Card Transactions are debit card purchases or ATM cash withdrawals or ATM transfers from Accounts.
Everyday Transaction fees are calculated and charged at month-end for Vancity’s chequing and savings products, with the exception of Jumpstart High Interest where the fees are incurred immediately when the transaction is made. Overdraft interest, not covered by a Creditline line of credit or a Personaline line of credit, accrues immediately and will be calculated and payable at month-end.