MANAGEMENT

Detailed explanation-1: -20%: Savings Finally, try to allocate 20% of your net income to savings and investments. This includes adding money to an emergency fund in a bank savings account, making IRA contributions to a mutual fund account, and investing in the stock market.

Detailed explanation-2: -If You Are Paid Bi-Weekly: Multiply your take-home pay for one paycheck by the number of paychecks in a year: 26. Then divide this number by 12 to get your monthly income. If You Are Paid Weekly: Take your weekly pay and multiply it by the number of weeks in a year: 52.

Detailed explanation-3: -Savings Rate (SR) is defined as the ratio of savings divided by your income. Your savings over any period is your income-expenses. Thus your SR = (Income after tax-spending) / (Income after tax). To convert this SR to a percentage, multiply by 100.

Detailed explanation-4: -Figure 20% of your monthly income and multiply by 12. That’s how much you can reasonably save over the 12 months in a year. Look at that! You just made your first savings plan!