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"I am 32 and married. Am I saving enough?"

It's a question, some of you have asked, and many of you have thought about. Whether you save 5% or 50% of your monthly income, how do you come to know if that is "enough"?

It's a question, some of you have asked, and many of you have thought about.

Whether you save 5% or 50% of your monthly income, how do you come to know if that is "enough"?

When you are in your early 30s, the following scenarios are generally applicable to your life:

#1. Your marriage is young and you are beginning to discover your dreams as a team, rather than just as individuals. You may already have children or be planning for one.

#2. Your expenses have started going up as a family, normally as part of moving to a bigger home and associated expenses.

#3. You are now beginning to think of the long term seriously.

#4. Losing your job, especially if you are a primary earner has serious repercussions.

Depending on your income your expenses might be consuming most of it or a small part of it. This is also the time when you are likely to have taken on a home loan. Considering all of this, saving is probably a necessity for you rather than an option.

Here’s a list in order of priority, that you need to save for:

#1. 6 months of expenses (including loan EMIs) –

A job loss or loss of income can be hard to handle at this stage of your life. So you should be saving for this first. Debt funds or RDs are ideal for this purpose.

How much time do you have? 

Ideally less than 2 years.

How much should you save? 

At least 1/4th of your monthly expenses. So if your expenses are 20,000 per month, save 5,000.

#2. Children’s Education –

Saving for your children’s education and their marriage is another thing on your mind at this age. It’s a good idea to allocate a part of your savings for them.

How much time do you have?

Typically 15-20 years.

How much should you save?

At least 10% of your salary every month, more if you want to retire sooner. To learn how you should save for this, read this article.

#3. Retirement –

There will come a time when you simply wouldn’t want to work. Start saving for that time now, if you haven’t already. This is a big goal and you will need time to reach it, so starting now is incredibly important considering you might want to retire at 60, at least. Equity mutual funds are ideal for this goal.

How much time do you have?

15-25 years, but you need to start now to reach an adequate amount.

How much should you save?

At least 10% of your salary every month, more if you want to retire sooner.

In your early 30’s, you have enough time for compounding to work for you and generate a significant nest egg. You should make it work in your favour.

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