As a millennial, we face a lot of 2020 financial issues that are part of our daily landscape nationwide – rising rent and home prices, student loans, supporting other family members, and credit card debt. I have two savings models that I would like to share with you, as it depends on how much money I am making for that year. As a millennial, my millennial income can differ depending on what I am doing for that year. My life isn’t like a traditional pathway where I stick with a company for 30 years and retire with my white picket fence. I’m sure many of my fellow readers, you have also hopped from one company after another! Hi!

Savings has been incredibly frustrating and incomprehensive to me because I had student loans I had to pay off and then had to work out how to live independently and deal with random emergency situations. I have learned that having a 6-9 month emergency savings is literally the most adult thing I could ever do for myself. 

After finding how to get through a point of calmness and sophistication that I could look at this topic straight in the eye, several conversations with my close circle, and truly auditing my finances – these are the two models I flip on and off depending on my millennial income.

50/30/20 savings formula

Savings Model #1: 50/30/20 – Under $100K Per Year Salary

This is the classic OG savings model that a lot of people have learned to apply in their budgeting process. It’s called the “50/30/20” which is a basic rule to divide up after-tax income and allocate it to spend: 

50% on needs
30% on wants
20% on savings

Due to the increase of rent and home prices, my takehome amount would be used 50% on all the basic needs to keep a roof over my head with working electricity, internet, and water/sewage bills and includes basic groceries to keep my tummy full and healthy. My rent was so fricken high that I had no choice but to use this 50/30/20 model because I was living in the city.

So let’s say you make $75k annually as a mid-senior level worker. Your net pay after taxes can be at $59,588 per year or $4,966 per month. 

50% on needs: $4966 monthly net pay x 0.50 = $2,483
30% on wants: $4966 monthly net pay x 0.30 = $1,489.80
20% on savings: $4966 monthly net pay x 0.20 = $393.20

The above savings model should be the breakdown of how much you put money aside to follow the 50/30/20 rule. If you were to follow this rule, you could add to your savings every year, $4,718.40. It seems like a small amount to add into your savings, but in 10 years, that diligent savings amount per month would add up to $47,184.

30/30/30/10 savings formula

Savings Model #2: 30/30/30/10 – Over $100K Per Year Salary

If you make over $100,000-200,000 annually, you’ve earned this salary with your skills. Still, you got to face the facts that you need to save a lot more so that Savings Model #1 – due to any surprise emergencies, which includes lay-offs, house damages in multiple areas, car accidents, etc. 

30% on needs
30% on wants
10% on other people or pets

Let’s use a salary of $125,000 as an example. Your net pay after taxes can be at $94,191 per year or $7,849 per month. 

30% on needs: $7,849 monthly net pay x 0.30 = $2,354.70
30% on wants: $7,849 monthly netpay x 0.30 = $2,354.70
30% on savings: $7,849 monthly netpay x 0.30 = $2,354.70
10% on other people* or pets: $7,849 monthly netpay x 0.10 = $784.90

*This refers to support family members, your significant other, or your fur babies. 

In addition to your diligent savings since having a $75k salary, by increasing your savings % with a higher salary will help you when everything in life happens at once: buying a house, buying new appliances to put in that house, a new car, engagement, marriage/wedding, a baby, and whatever else life throws at you when adulting.


How are you saving at the moment? Are you able to save right now? Let’s talk about what you want to save for in the comments below!

Cee Ng

Hello, I’m Cee! I’m a lifestyle blogger during my downtime and a consultant and producer during the day. This blog is to share experiences in travel, work, beauty, relationships, cooking, shopping and lifestyle tips that I hope can inspire you to live the best version of yourself in whichever stage you are in life and have fun with no regrets!