How to use the savings calculator?
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Using our savings calculator is really simple. First, you need to add up all your earnings for the month; these should be regular, monthly recurring incomes. Once you have calculated your monthly earnings, you need to add up all your mandatory expenses. Mandatory expenses for everyone include housing costs, possibly medical expenses, i.e., expenses that are essential for survival. Please note that food expenses will be calculated for you in our calculator, so do not include food costs in mandatory expenses. Housing costs refer to rent or mortgage payments, water bills, electricity bills, and possibly waste disposal fees if you live in a house.
Our calculator will calculate three separate funds for each month, and it's up to you whether you want to follow these instructions. The first fund is the food fund, which means the amount you can spend on groceries. The next fund is the entertainment fund, which includes possible phone and internet expenses; please remember that streaming services and other entertainment expenses also come from the entertainment fund. The last fund is called the savings fund, which is the amount you should save monthly in your own account or you can also consider investing the amount in stocks; we will provide you with information on this through our free courses.
Why should I save?
Each of us should have a so-called emergency fund that covers three months of your expenses. This means that if you become unemployed or fall ill, you should have an amount set aside that will cover your expenses for the next three months. The emergency fund can also be used for self-rewards, such as vacations or even buying concert tickets. The savings calculator is an easy way to calculate how much you can save. Many people who want to build wealth in their lives use this technique. Saving is also a way to secure your own future and possibly the future of your children.
Food Fund: The purpose of the Food Fund is to provide you with an amount that you can use for monthly grocery shopping. You can use this amount only for your grocery shopping and not for buying alcohol, tobacco, or hygiene products.
Entertainment Fund: The purpose of the Entertainment Fund is to provide you with a monthly budget that you can use to pay for phone bills, internet, streaming services, and other expenses. Alcohol and tobacco products are also included in this fund, and you can use it to buy clothes and hygiene products.
Savings Fund: The purpose of the Savings Fund is to save a specific amount every month. You can either save this fund in your own savings account or invest this amount every month, for example, in an index fund like S&P 500 (SPX500). You can do this using eToro, learn more here.
