Question

I have a job and my checks are usually 500 dollars. I want to save up 20 thousand dollars. I am about at 4 thousand now. I want to save money while still be able to spend money. How should I divide how much I save and how much I spend

Answer 1

No I get payed every 2 weeks so each check is about 500 hundred and I don’t have any bills whatsoever

Answer 2

To determine how to effectively save up to $20,000 while still spending money, you can follow a structured plan. Here are some steps and a suggested approach:

### Current Financial Situation:
- **Current Savings**: $4,000
- **Target Savings**: $20,000
- **Amount to Save**: $20,000 - $4,000 = $16,000

### Income:
- **Monthly Income from Job**: $500 (assuming once a month, otherwise adjust accordingly)

### Time Frame:
Decide how quickly you want to reach your goal. For example, if you aim to save the remaining $16,000 in 2 years (24 months), you would need to save approximately $666.67 per month.

### Budgeting Approach:
To balance saving and spending, a common method is to follow the **50/30/20 rule** (you can modify it based on comfort):

1. **50% Needs**: Allocate half of your income to essential expenses like rent, utilities, groceries, and transportation.
2. **30% Wants**: Use 30% for discretionary spending like entertainment, dining out, and hobbies.
3. **20% Savings**: Allocate the remaining 20% for savings.

### Adjusted Calculation:
1. **Total Income Needed for Savings**:
- If you follow the 50/30/20 rule, and using the above $500 monthly income:
- **50% ($250)** for needs
- **30% ($150)** for wants
- **20% ($100)** for savings

However, you need $666.67 per month to reach your goal in 2 years.

### Custom Allocation:
To directly meet your savings goal while also allowing for spending, consider the following allocation:

1. **Savings**: $500 (setting aside a higher amount to hit your goal more quickly)
2. **Wants**: $150 (enough to enjoy some discretionary spending)
3. **Needs**: Use remaining funds for essentials

### Potential Saving Timeline:
- **Monthly Savings Goal**: You might decide to save about **$666.67 per month** (or round it down to fit your budget better).
- **Time to Reach Goal**: At that rate, you'll reach your goal in about **24 months** (2 years).

### Flexibility:
Adjust the savings and spending mix based on any changes in income, unexpected expenses, or lifestyle changes. If you find you can save more in some months, aim to do so to finishing faster.

### Summary:
Aim to save approximately **$666.67 per month** from your total income (or determine a percentage based on your needs), while still budgeting a reasonable amount for discretionary spending. Analyze your expenses regularly and make adjustments that allow you to stay comfortable while achieving your savings goal.