How much savings is enough savings?

[bns]

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I'm sure many of us wonder how much we should be saving each month and sometimes we even wonder why we should be saving.
Here's a thread that should more or less serve as a guide.

"The more you save, the more you lose" - it is better to invest your excess money in mutual funds or the stock market (if you know the ropes.)

Confused? Here's a very simple explanation. When you save your money, you either put it in a piggy bank at home, or in a bank to gain interest. If you check the interest rates of the leading banks, it is about 0.25% per year less withholding tax.The inflation rate of the Philippines is about 4.5% on average. If you put your money in the bank, you will lose approximately 4.25% buying power each year so the more money you put in, the more value of money you lose. Dili man cya lisud sabton noh?

So how much cash should we have on hand?

It is necessary to save up for an emergency fund - This fund should be able to cover 6 months of your expenses and must only be used during absolute emergencies. Dili na emergency ang magpalit ug iPhone 5 para ma-in ka.

So nganu 6 months raman? As mentioned earlier, the more you save, the more you lose. So it is better to save just enough to cover your emergencies.

Naa daghan makaingon, gamay rana ang 6 months uy. Unsaon man kung masunog ang balay, mabangga ang sakyanan, or magkasakit ko. Mao na ang gamit sa insurance. You wouldn't have to worry about these kinds of unexpected expenses that may drain your savings because should these things happen, the insurance company would be paying for it which is why you must always consider it a part of your financial plans (see my other post: Financial Planning 101)

It is necessary to save up for something you want to buy, a business you want to put up, or a gift you want to give your parents - Never spend more than you earn. If you want to buy something, make sure it fits your budget if you want it 0% on your credit card or just save up until you can pay for it in full.

Basin niya nagincome ka ug 20k per month pero imo gastohonon monthly tungod nipalit ka ug 46" LED TV @ 0% for 6 months nahimo ug 30k unsaon nalang intawn nimo, gamay pakag sweldo, wala pakay emergency fund. Kung naay emergency, ang 50k na TV ibaligya ug 25k para madali kahalin kay kinahanlanon kaayu. Samot kapordoy.

So what should I do with the extra money I have each month? Daghan kag pwede buhaton, pwede nimo ikaon sa gawas, pwede sad isubscribe ug 5mb na internet para mas paspas ka makabasa sa istorya.net, pwede igasto bakasyon, but the best thing you can do is to invest it in funds or the stock market and let your money grow. Di man jud makapildi ang tubo sa banko vs sa tubo sa mga mutual funds. Lahi sad na ang negosyo. A business does not need investment, it needs capital. Lahi na cya na topic. We can probably discuss that in the future.

[pridi]

emergency fund, extended family support fund, retirement fund, OPEX fund and enjoyment fund

[makie29]

For emergency fund, at least 6 months worth of expenses should suffice but depende ni sa tao nga nagsave. If you're not comfortable with 6 months, go for a greater one, maybe at least a year's worth of expenses.