It’s not enough to cross your fingers and hope that you have a little left over from your paycheck.
First, compute how much you need to save—for your child’s college tuition, a downpayment for your home, or a vacation.
Second, factor in the cost of inflation. (For a safe bet, average the inflation trends for the last 5 years). Compute this against the number of years until the money, then add a buffer of about 10% for unforeseen costs and economic fluctuations.
Third, divide this amount by number months x number of years. Set this aside religiously. Treat it like a bill you have to pay (or, a way of “paying yourself”).
