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How big should your savings be at every age?

Fri, 01/21/2022 - 10:13

Many of us were raised to think that hard work equals money. So when we need more money, we take on more work. But can you keep working forever? Do you even want to? Wouldn’t it be nice to retire one day with a cushy stack of savings for you to enjoy?

 

That’s our dream for you.

 

We’re Tonik, the first ever neobank (we’re all about digital banking) in the Philippines. We hold the first private digital bank license from the Bangko Sentral ng Pilipinas (BSP). We do all our banking in one money management app, which means we save on overhead costs. (No branches to maintain!) Those savings go to you as one of the country’s highest bank interest rates.

 

We really want you to save more as we grow old with you. So let’s start making plans and set financial goals for every age.

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20s Savings: 0.5x your annual income

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The amount may sound huge, especially when you’re studying or entering your first job. But it’s not an impossible goal.

 

What’s important is that you make saving a habit.

 

Start with a savings account. Opening one doesn’t have to be hard. To start a Tonik Account, all you need are 5 minutes and 1 government ID. That’s just how a neobank works. (We’re serious about making Philippine digital banking easy.) Plus, there’s no minimum or maintaining balance. Think of your Tonik Account as a digital wallet that also earns 1 percent interest per annum.

 

Once your Tonik Account is up, you can funnel part of it into pockets called Stashes. They help you organize your financial goals, so you can see what you’re saving for and how close you are to achieving them in one money management app.

 

Create your Emergency Stash and set your goal amount for at least 6 months’ worth of expenses. Every time you earn a little extra, put it in your Stash and let it grow at the rate of 4 percent interest per annum. If you want to create a Family Emergency Stash or any other Group Stash with more people chipping in, the interest rate bumps up to 4.5 percent per annum.

 

You can withdraw your Emergency Stash any time, but try not to touch it as much as possible. You never know when you may need this fund and for how long.

 

You also need to fix your spending habits. Your Tonik Account instantly comes with a free Virtual Debit Card (You can order a physical one too!) They’re meant to make paying easy and secure, but remember, money not spent is money saved. And that money can go toward something more important in the future.

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30s Savings: 1x your annual income

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You’ve been working hard, so let’s make your money work for you with investments. The trick is only using money you can afford to set aside for half a year or longer. You also need to remember that all investments come with some level of risk, so know how much risk you’re comfy with before investing.

 

If you’re just dipping your feet, something low-risk like Tonik Time Deposits are a great starting point. They go up to 6 percent interest per annum, one of the highest bank interest rates in the country. (It’s the headline that got heads turning and wondering if we’re the best bank for Time Deposits in the Philippines.)

 

You only need to deposit a minimum of 5,000 PHP and lock it in for 6 months. We also offer other fixed term options for the same minimum deposit. As a neobank, Tonik believes that everyone deserves a chance at growing their wealth with Philippine digital banking.

 

Once you’re more confident, you can then diversify your investment folio by getting into other types like UITFs, mutual funds, stocks, bonds, and more. They each carry their own risk level, so again, make sure you know what you’re getting into.

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40s Savings: 3x your annual income

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It’s a big goal, but then again, you’re probably making big money by now. After all, you’ve been building a career, a folio of investments, and quite the savings stash.

 

So how about focusing on getting your own house? Starting that venture you’ve always wanted? Creating that fund for your kids? It’s time to level up your financial growth and stability.

 

You don’t need to pay for these investments all at once, of course. If you’ve maintained solid saving and spending habits all these years, you’ve probably made sure to pay back debts on time (that includes credit cards). And that means a pretty great credit score.

 

Credit scores are a way for financial institutions to gauge just how responsible you are to pay back loans. Some people may find assessment and loan application tricky, but don’t worry. Tonik is already working on offering quick and easy online Loans in the near future. That’s right. Soon, you’ll be able to save, invest, and loan, all in one money management app.

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50s Savings: 5x your annual income (or more)

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Retirement is just around the corner. It’s the big moment you’ve been saving up for. But do the numbers match?

 

Think about your current lifestyle. Is this what you want to sustain into your later years? How much does it take to keep it up? Now break out your calculator:

 

Annual Expense x 25 Years = Retirement Fund

 

This is an overly-simplified formula, of course. A lot of other factors can still come into play. But we want to make sure you can still remain financially independent living a life you love after retirement.

 

While your retirement pay and pension can give your bank account a huge boost, you can’t depend on them alone to sustain you through the years. Having a sizable savings account, emergency stash, and investments can help you grow old gracefully without being a burden on anyone.

 

So now that we’ve got a game plan, what do you say about growing old together? Hit download and let’s get started.

 

 

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