Saving for your future

Saving and investing have pros and cons and deciding between the two will depend on your circumstances and financial goals.

Everyone’s situation is different, so there is no single rule to follow that will tell you exactly how much money you'll need for your retirement. It will depend on many factors, including:

•    The age you plan to retire
•    Whether you own your own home
•    The rate of inflation
•    Whether you have debts that you need to manage
•    Your family and number of dependents
•    Whether you plan to continue working, in any capacity, and semi-retire

A good starting point is to assume you will need between half and two-thirds of your salary, after tax is deducted, to maintain your current lifestyle.

Some people find it helpful to follow the 50-30-20 model, where you aim to spend no more than 50% of your income on the things you need, 30% on the things you want, and 20% on building up savings or repaying debts.

When planning for your future, here are 3 key points to keep in mind:
1.    Start as soon as you can. The earlier you start saving, the more the interest on your savings will compound, and the longer you will have to save.
2.    Make the most of any tax-free savings and employer contributions you're entitled to.
3.    Build your knowledge. You might want to seek advice from a professional financial adviser.

Saving is important, and with a little effort it can become a healthy financial habit.

Research suggests that a new habit takes a little more than 2 months to form, and after that a behaviour becomes automatic. And remember that saving is good for your health and mental wellbeing, too, so it’s worth getting into the habit as soon as you can.