The rules of saving

Women with CentsBlog, Budgeting

There are a few questions that I get asked very frequently. How are you? How’s your little boy? What’s the weather like in Canberra? And what percentage of my income should be going into savings?

I get it a lot! And I put it down to the endless rules of thumb that are being exchanged at Sunday barbeques around the country.

Here are just some of the theories floating around:

The 50/30/20 Rule
Suggests half of your income should go on necessities, 30% on splurging and 20% on saving or investing.

Richest Man of Babylon
This book suggests saving 10% of everything you earn.

Save your age
There is another interesting theory that says you should “save your age”, so if you’re 30, save 30% of your income, if you’re 40, save 40%, and so on.

Just like the rules of dating, these saving rules of thumb unfortunately don’t work the same for everyone. For example, if you’re a lower income earner, it’s likely that the majority of your income is going on essentials. And if you’re a high income earner, you could very well be overspending by following some of these guidelines.  


I prefer to work on a case by case basis. I believe that you are more likely to achieve your desired outcome if you have clear goals in mind and work backwards from there.

Check out our Cents and Sensibility program if you’d like a helping hand, but here are some tips to give you a head start:

Step 1. Set a goal
Make sure you can clearly articulate your goals the SMART way.

Step 2. Write down your why
Your ‘why’ will help you stay the course when the going gets tough. So write down why it is important to you to achieve your goal? How will you feel when you achieve it? How will you feel if you don’t? And remind yourself each day.

Step 3. One step at a time
How does one eat an elephant? One bite at a time. Your goals should be the same – break them down into realistic, bite-size chunks.

Step 4. Gain momentum
Behavioural psychologists tell us that gaining momentum is the key to achieving goals. So start by identifying and ticking off three quick wins on the path to your goal. Starting to make progress will motivate you to keep going.

Step 5. Brainstorm
If you have reverse engineered your goal and found that you can’t achieve it in the set time-frame then do some brainstorming. Are there areas you can cut costs to get you closer? Are there ways to make more money, even for a short time? If you exhaust all possibilities, don’t be too hard on yourself, re-calibrate your goal to make it achievable.

If you don’t have any goals in mind yet, then pick a rule that works for you while you take time to figure it out. Regardless of which rule book it comes from, doing something is always better than doing nothing!


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The information provided by Women with Cents is general in nature. It doesn’t take into account your objectives, personal financial situation or needs. Think of it as educational material in which to help you make more-informed decisions. We recommend you obtain financial, tax and credit advice specific to your situation before making any investments or financial decisions.

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