Saving from your salary: 3 to 6 months' emergency fund, the 50/30/20 rule and monthly savings
On the same salary, HR sees two kinds of employee: those with an emergency fund resign and take their time choosing the next job, while those without one accept whichever job pays soonest. The difference is not income but a savings plan. This article goes from take-home pay, the emergency fund and the 50/30/20 rule to the two questions the calculator at the top of this page answers: how much to set aside each month and how long it will take. Interest rates in the examples are assumptions.
Start your savings plan from take-home pay
The plan has to be based on your net salary, the money that reaches your account after insurance and tax, not the gross salary in your contract. A gross salary of 20 million VND in Region I with no dependants gives take-home pay of 17,780,000 VND in 2026; that is the figure to divide up. The 50/30/20 rule is a popular guideline: 50% for essentials such as rent, food and transport; 30% for wants such as eating out, travel and shopping; 20% for savings and debt repayment. On 17.78 million, the three parts are 8.89 million, 5.33 million and 3.56 million VND.
In big cities, rent can push essentials up to 60 or 70%; in that case keep at least 10% for savings and raise it with every pay rise. The rule not to break: transfer your savings on payday, and only what is left is spending money.
- Emergency fund
- 3 to 6 monthsBased on spending, not income
- 50/30/20 rule
- 20% savedA popular guideline, adjusted to your circumstances
- Interest rate in this article
- 6% a yearAn assumed rate for illustration, not a real rate
- Calculator limit
- 1,200 monthsBeyond 100 years it reports the goal as out of reach
An emergency fund of 3 to 6 months' spending comes before every other goal
An emergency fund is money kept separate and available immediately, for when you lose your job, fall ill or your vehicle breaks down mid-month. The suggested level is 3 to 6 months of spending, not income: if you spend 12 million VND a month, you need 36 to 72 million; with a stable income 3 months is enough, while freelancers and a family's sole earner should keep 6 months.
Using the calculator: with a target of 36 million VND, nothing saved yet, 3 million VND set aside each month and an assumed 6%, you get there after 12 months with a balance of 37,006,687 VND; interest contributes just over 1 million, so at this stage the discipline of saving matters more than the rate. Unemployment benefit pays 60% of your average salary for up to 12 months, but you have to file a claim and wait for it to be approved, so the emergency fund still has to come first.
Two calculations: time to reach the goal and the amount each month
- Choose the calculation
"Time to reach the goal" when you already know how much you can put aside each month; "Monthly amount needed" when the goal has a deadline, such as paying tuition fees in September or a home deposit in 3 years.
- Enter the goal, current savings and interest rate
Current savings means money already set aside for this particular goal; the interest rate is the one you are actually offered, and you can enter 0 if you only want to measure your saving discipline.
- Read the results and try scenarios
The number of months or the monthly amount, the total paid in, the interest and the chart. Add 1 million VND to the monthly saving or cut the goal by 10% to see how the plan changes.
In the first mode, the calculator simulates each month: the balance is multiplied by (1 plus the annual rate divided by 12) and then the monthly saving is added, which means saving at the end of the month with interest compounded monthly, stopping once the balance reaches the goal; the limit is 1,200 months, or 100 years, and beyond that the calculator shows "Goal out of reach". The second mode uses the annuity formula to find the monthly amount; at 0% interest it divides the shortfall evenly.
An example of the first mode: with a goal of 300 million VND, 50 million already saved and 5 million VND set aside each month at an assumed 6%, it takes 43 months, with 265 million paid in and 36,157,755 VND earned in interest; without interest it takes 50 months. The second mode, with the same goal over 36 months, gives 6,105,484 VND a month, or 6,944,444 VND without interest.
Example: a 300 million VND home deposit in 3, 5 or 10 years
| Term | Monthly, no interest | Monthly, 6% interest | Total paid in | Interest |
|---|---|---|---|---|
| 3 years, 36 months | Monthly, no interest6,944,444 | Monthly, 6% interest6,105,484 | Total paid in269,797,437 | Interest30,202,563 |
| 5 years, 60 months | Monthly, no interest4,166,667 | Monthly, 6% interest3,333,200 | Total paid in249,992,023 | Interest50,007,977 |
| 10 years, 120 months | Monthly, no interest2,083,333 | Monthly, 6% interest1,275,513 | Total paid in203,061,506 | Interest96,938,494 |
Stretch the term and the monthly amount falls quickly while interest carries a larger share: 10% of the goal in the 3-year plan, 32% in the 10-year plan. But a goal such as a home deposit is exposed to house prices rising over time, so a long plan needs the goal reviewed every year. To let 50 million VND grow into 300 million on its own, without further contributions, at an assumed 6%, the calculator gives 360 months, exactly 30 years.
Writing your savings plan down, and common mistakes
Sample of a short written plan
Goal 1: emergency fund of 36,000,000 VND, equal to 3 months of spending. Current savings: 0 VND. Save 3,000,000 VND a month by automatic transfer on the 5th of each month; expected to be complete after 12 months, in October 2027.
Goal 2: apartment deposit of 300,000,000 VND, starting after goal 1, with 50,000,000 VND of bonus money already available. Save 6,105,484 VND a month for 36 months at an assumed interest rate of 6% a year; review every January.
Rules: with every pay rise, increase savings by at least half of the rise; never draw on the emergency fund for goal 2.
- Setting a goal without a specific amount and deadline.
- Saving whatever is left at the end of the month instead of transferring it on payday.
- Keeping the emergency fund in the same account as day-to-day spending money.
- Using an optimistic interest rate in the plan and then being disappointed by the real figures.
- Forgetting about inflation for goals longer than 5 years.
- Abandoning the plan altogether after one month of overspending.
The most common mistake among people new to work is saving "whatever is left at the end of the month", when there is rarely anything left. The second is letting spending rise by exactly 10% when pay rises by 10%; keeping at least half of each rise is a way to grow the plan without feeling the pinch.
Using the savings planner
Choose the calculation, then enter the amount you want to have, what you already have, the monthly saving or the number of years, and an assumed interest rate; the calculator shows the time or the monthly amount, the total paid in, the interest and a chart of the balance growing towards the goal line. Try adding 1 million VND a month to see how much sooner you get there; that is usually the most useful discovery. The calculator assumes a constant rate, no withdrawals along the way and no deduction for taxes or fees.
Frequently asked questions
The 50/30/20 rule suggests 20% of take-home pay; if your rent is high, start at 10% and raise it with each pay rise. What matters is transferring it on payday rather than saving whatever is left at the end of the month.
3 to 6 months of spending, based on what you spend rather than what you earn. 3 months with a stable income, 6 months if you are a freelancer or your family's sole earner.
With 50 million already saved and an assumed 6% a year, it takes 43 months; without interest, 50 months. Starting from zero at the same rate, it takes 53 months.
With the current savings and monthly amount you entered, the balance does not reach the goal within 1,200 months, for example when you add nothing and the rate is 0%. Increase the monthly saving or lower the goal and recalculate.