Monthly Savings Made Easy: Practical Tips for Success
8-minute read. Updated August 27, 2023.
Save, Save, Save. You must be sick of hearing this! Saving money is what we’ve been told since we were young; when all you wanted to do was to spend your $10 pocket money.
Now if you invested this $10 extra cash in a Disney share 30 years ago, good for you, You must have been a very smart kid (assuming you still hold that share of course)!
But for most of us, the ability to put money aside comes later in life; saving money can be a real struggle for households, particularly in times of economic downturns.
As a personal finance writer, I was recently talking to a friend of mine, who is in her late twenties, advising her to start her retirement savings, even if she can only save each month a small amount. Her response was "What’s the point, I could be dead in 10 years!".
That’s a pretty grim take on saving and investing, but what she meant was that she’d rather live in the moment, enjoying life without setting financial goals or worrying about the future.
We all know that the world embraced consumerism, and there are thousands of ways to spend your $10. And with the current low interest rates on saving accounts, banks aren’t encouraging you to save either. Let's demonstrate that having a saving plan is not as difficult as you think.
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Regularity Is Key for Your Savings Accounts
Whether you save each month a certain percentage of your income for your emergency fund, or invest some of your salary in the stock market, being disciplined and regular is what will make the difference later down the line.
General guidelines from financial experts suggest putting some money away in savings accounts as soon as your salary is paid; which is a lot easier than hoping there will be some left to save at the end of the month.
Warren Buffet, arguably the most successful investor in history, once said: "Don't save what is left after spending; spend what is left after saving."
Saving Money: Technology Can Help
Many bank applications, particularly online banks, offer cool features to help you save money. With the digital banking app Revolut for example, you can create your own savings plan with automatic transfers to a "vault" - an easily accessible deposit account - at your chosen frequency.
Let’s say you transfer as little as $1.50 a day to your vault, and your partner does the same; you’d have a combined saving of over $1,000 after a year. Start small, but be regular.
FIRE: Financial Independence, Retire Early
Indeed, when following the FIRE table, which indicates roughly when you could retire based on how much you save per month, it does show that you’re only a few years away from retirement if you can save 90% of your salary. Whilst you will rapidly accumulate a comfortable nest egg by doing so, who can save 90% of their ANNUAL household income?!
If you need help estimating your average savings or assistance with retirement planning, now is the time to consult a financial advisor.
Retirement Savings: The 50/30/20 Rule
If you are at the beginning of your saving journey, this is a more realistic target. It is generally recommended to split your monthly after-tax income into three categories:
50% Needs: Your monthly bills and commitments which you MUST pay each month. These include fixed expenses like your rent or house repayment, groceries, utilities, car payments, insurance, etc…
30% Wants: The "I want to treat myself" expenses, like going to the cinema, shopping, dining out, or going on holidays.
20% Savings: Plan for the future; try to allocate 20% of your net income into a savings account, or retirement account, and to build up your emergency fund.
Consider prioritizing paying off any high-interest debt like credit cards or student loans before allocating funds to other savings goals, if possible.
Some might already follow the above financial planning rule without noticing; but for others, saving 20% of their monthly income seems unattainable.
Start going through your Wants, see what you can cut down on, even temporarily, and move this amount to increase your Savings allocation.
Full article here The 50/30/20 rule: How to budget your money more efficiently
Download Free Excel Templates
Microsoft Excel comes with some good budgeting templates, fully customizable. We have reviewed these two for you to download:
- Personalized Monthly Budget Spreadsheet
Streamline how you budget your income each month with this comprehensive budgeting template. Excel does the math so you can concentrate on your finances. It includes an array of categories and subcategories, so you can set it up exactly how you’d like, with room for variable expenses.
- Monthly Savings Calculator
Once you’ve established how much to save each month using the first document, use this calculator to track your savings and find out the percentage of money saved each month. This simple monthly budget template compares your monthly income to your monthly expenses and helps you visualize living expenses and how they stack up. Remember, saving 20% of your income is the initial goal!
Take control of your finances and future. We have found the top companies in the personal finance space and the most helpful tips & tools that offer you practical strategies on budgeting, savings and debt repayment, investing, and more.
A Closer Look at Revolut
Revolut, the global financial super app founded in London in 2015, has surpassed 20 million retail customers worldwide. From easy money management, to travel perks and investment accounts; it is an all-rounder online bank application.
Revolut offers dozens of innovative products including peer-to-peer payments, saving Vaults, Junior accounts, cashback on hotel and experience bookings, brokerage services, and more.
Whilst they do offer paid plans with great savings account perks, you can get started free with a Standard account, unlocking many of their money-management tools.
Those familiar with online banking apps would know the main features that come with such apps. I will therefore only highlight my favorite Revolut features:
Vaults: Reach your financial goals faster
I use that savings feature exactly as I described above, with automatic transfers to save each month effortlessly. I opened 3 of these Vaults savings accounts: one holiday fund, one for debt repayment, and one for fixed expenses.
I also set up a separate vault to round up spare change. When you spend $19.10 with your Revolut card, your checking account balance is debited by $20.00, with $0.90 automatically sent to your ‘’Vault’’.
The amount you save this way would depend on the number of card transactions you do, but you can easily reach $100 in a matter of months. You can also make a manual transfer into your vault by stashing a little cash whenever you feel like it.
Customize your Vaults to work for your savings goals, by setting amounts and deadlines to make sure you’ve got the money you need when you need it. The aim is to increase your savings rate easily.
Open a Group Vault with family or friends and get there faster, together. Whether for an emergency fund or a holiday, put money aside in 30+ currencies, including crypto or commodities*.
Budgeting and Analytics: Never overspend again
Take control of your money with smart budgeting and analytics tools, which I would call the digital version of the above Monthly Budget Excel Spreadsheet.
The Revolut app lets you set spending limits to help you stick to your budget. It can even calculate limits to recommend based on your spending predictions, or you can simply enter how much you want to spend and save each month.
Every week, you get insights for a deep dive into your spending habits. From trading to your savings goals and donations, this gives you a close look at your financial progress weekly; with a breakdown by merchants, categories, countries, and more.
Scheduled Payments: Manage subscriptions smarter
This is the one place for all your recurring payments. You can organize subscriptions by adding your scheduled payments to Revolut to track your spending and see where you could start saving.
Block unwanted subscriptions easily and never get charged for a trial again! The app will detect when free trials are ending and alert you ahead of time so you can decide if you want to cancel.
You will also get reminders for upcoming payments. Say goodbye to surprise charges with notifications if there's not enough money to cover scheduled rent or mortgage payments.
Stock & Crypto: Get investing from just $1*
You can now invest in 1,500+ global companies’ shares, straight from your phone. From Apple to Zoom, trade in fractional shares (stock portions less than a full share), from as little as $1*.
You’ll then get real-time updates, and be able to explore companies’ performance and market news in-app or get notified when stocks hit your desired prices.
All this, and more, is with the Revolut free Standard plan!
Revolut paid plans
The 3 paid accounts tiers (Plus, Premium, Metal) are worth looking into as they give you added benefits such as (depending on the plan): discounted international transfer fees, free Airport lounge access with Smart Delay, Ticket and Event coverage, no fee ATM withdrawals within limits, etc…
You can also be earning interest on savings, accrued daily.
I was personally on the Standard Revolut plan for years before subscribing to the Premium plan, primarily to get overseas medical insurance, delayed baggage, and flight insurance. I find this excellent value for money as I no longer need to subscribe to separate travel insurance premiums, with even better coverage now.
Revolut is just one of the many online banking services available nowadays. I certainly feel I made an excellent choice by picking Revolut!
No Financial Advice. This article does not provide financial advice and has been prepared without taking account of any person’s investment objectives, financial situation, or particular needs.
*Other fees may apply, Capital at risk, commodities, and crypto are not FCA-regulated. Some Revolut features are available in specific countries only.
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