How to Plan Your Savings?
Money is a medium of exchange. It can be a banknote, a coin, or a string of numbers in a bank account.
We work hard to make those numbers grow, but it is easy to forget that what we ultimately need is the life money can help us live.
Suppose you have CNY 100,000 saved. Without a clear purpose for that money, you might spend it without realizing, or leave it untouched because you cannot bring yourself to use it.
HeyCost's savings management is designed to help with this.
We want every part of your savings to have a clear purpose, as if every unit of money had a job. This helps you use what you have thoughtfully and save with more direction.
01 Daily Cash 💸
Daily Cash is money for life today, ready to use whenever you need it. Meals, shopping, transport, entertainment, rent, and utilities can all come from here.
Try tracking your spending for 1–3 months to understand how much you need each month. Then look ahead for irregular expenses, such as a trip, car maintenance, or an annual subscription, and make room for them too.
Since you need easy access to Daily Cash, it is better kept in an account that lets you access it readily, without focusing too much on returns.
Daily Cash covers everyday life and foreseeable expenses, but life can still bring changes you did not plan for. Alongside the money you expect to spend, you need to prepare for that uncertainty.
02 Emergency Fund ☂️
An Emergency Fund is money set aside for that uncertainty. Your work may change, you may need time to recover, or you may want to pause and take a break.
Unlike Daily Cash, it is not meant for frequent spending. Its main purpose is to cover unexpected situations or periods without income.
A common guideline is to set aside enough for 3–6 months of basic living costs, based on your essential monthly expenses. If that is not yet possible, start with one month and build gradually.
Because you may need this money at short notice, consider keeping it somewhere readily accessible with relatively stable value, so you do not have to sell investments at a loss when you need cash.
Having this money set aside gives you more time and more choices when life changes.
03 Golden Goose 🪿
Gradually building money you intend to keep for the long term is like raising a goose that lays golden eggs. Saving and thoughtful investing give that money a chance to keep earning returns.
You might want it to cover part of your everyday expenses, support a comfortable retirement, or help you reach FIRE.
FIRE stands for Financial Independence, Retire Early. Put simply, it means saving enough to support your life even without working.
Financial independence comes in different degrees and does not necessarily mean stopping work altogether. Several common approaches reflect different goals:
- 🥬 Lean FIRE: A simpler life with lower expenses, making financial independence possible with fewer assets.
- 🍰 Fat FIRE: A more comfortable lifestyle in retirement, which requires building more assets.
- ☕ Barista FIRE: Continuing to earn some income through part-time or freelance work, with savings and investments covering the remaining expenses.
Your Golden Goose does not have to aim for FIRE. You can start building it simply to let future investment income cover part of your living costs.
The Golden Goose is better suited to money you do not expect to need for at least the next five years. Once you have arranged Daily Cash and an Emergency Fund, you can choose long-term saving and investment options that fit your risk tolerance.
💡 Investing takes ongoing learning. Five years is only a reference for planning when you will need the money. It does not mean you must invest it, or that holding an investment for five years guarantees a return.
Find an allocation that works for you
Daily Cash, Emergency Fund, and Golden Goose serve different purposes. Since everyone's income, expenses, and future plans differ, there is no single allocation that suits everyone.
Start by allowing for upcoming living costs and the Emergency Fund you need, then decide how much you can set aside for the long term.
If some money does not fit these three categories, you can manage it separately in an Other account.
As your life and income change, you can adjust the allocation. What matters is knowing what each part of your money is for, so your existing savings have a clear role and your future saving has direction.