Saving is smart. Although savings are not yielding much at the moment, it is nice to have a backup for unforeseen costs. Think of a traffic fine (oops), a broken TV or unforeseen maintenance work on your house.
How big should your savings buffer be so that you have enough to cover unforeseen costs? Not everyone needs the same amount. It depends on the composition of your household, whether you rent or buy. And whether you have your own car, for example.
What is the normal amount to have in your savings account?
According to CBS, a household has an average of €42,300 in its savings account. That sounds like a lot, and it is. The average picture is distorted by the wealthy households that greatly raise the average. In this case, it is also interesting to know how many savings is the middle (median) among Dutch households: €14,900. This means that half of Dutch households have more savings, and the other half have less.
The normal amount to have in your savings account varies by age
Of course, the amount of savings a household has also varies by age. The older you are, the longer you save.
Up to 25 years of age Average: €8,100Median: €2,700
25-35 years old Average: €16,200Median: €6,700
35-45 years old Average: €26,600Median: €10,900
Age 45-55 Average: €42,400Median: €16,300
Age 55-65 Average: €55,200Median: €21,000
Age 65-75 Average: €61,000Median: €24,500
Age 75-85 Average: €60,500Median: €25,000
85 years and older Average: €63,000Median: €25,400
But the real question is: how high should your savings buffer be, based on your lifestyle?
NIBUD has a handy calculation tool for this: The Buffer Calculator. This allows you to see which buffer is appropriate for your personal situation.
You fill in your details:
- Your family composition
- Your home situation
- Your income
- Your car
- Your current buffer
Also nice: the Buffer Calculator is based on averages. If you estimate that you are below or above average, because you always buy second hand furniture for example, then you can still easily adjust this manually. At the end you will see an overview with your recommended savings buffer, the NIBUD recommended buffer for you and your own, adjusted buffer. In one glance you can see where you stand immediately! Find your recommended savings buffer here according to the guidelines of NIBUD.
Ok, and then what? How much should you be able to save monthly?
Not everyone saves with equal ease. It depends on your personal situation. People who earn €4000 can save more easily than someone who earns €2100. Your fixed expenses also play a role in how much room you have to save. The higher your expenses, the less is left for your savings account.
The NIBUD uses the following rule of thumb: save 10% of your income. So if you earn €2100, the advice is to save €210 each month. Calculate the 10% of your income and see if you save or can save that amount each month.
Is that quite a high amount for you? It pays to take a close look at your financial situation. Maybe there are expenses you can easily cut back on, and by setting up your finances smartly, you can have more left over.
Automate your savings
Saving can be quite difficult in practice, but it doesn't have to be. There are various ways of saving that actually make it harder to really save money each month. For example, when you wait until the end of the month, with the idea of transferring all the money you have left to your savings account. And then it turns out you always run out of money. Or you automatically transfer an amount per month, but you have no plan for the rest of your finances. As a result, you sometimes spend too much – oops – and you take something from the savings account to get to the end of the month. This is very normal – and there is good news.
You can do better. There is a way to make it easier.
Now that you know how much your savings buffer should be and how much you can save each month, you can get started. It works best when you put your savings aside immediately, when your paycheck comes in. That way you know exactly how much money you have left to spend that month.
The Flow app automates this completely for you. You can set it up so that when your salary arrives, your savings are put aside. Then you can keep putting your monthly savings into your savings buffer, until your savings buffer is up to par. What does that look like?
- When your salary arrives, transfer €210 to the savings buffer account.
- Top up to €10,000
- Savings buffer full? Send the rest of your monthly savings to the holiday savings account (or another savings/investing project you have).
This is how you save every month. And, your savings buffer is kept up to date. Now you can save for other things, or start investing.