Investment: How much should we save?

Now the question is: How much should we save?

Saving should be enough to cover your immediate expenses for a few months. One has to decide one's comfort level of immediate expenses. Some may feel comfortable with six months expenses amount while others may need more.

Investment: Save first

Investment should start with our income. We have to save first from our income. We know, Income - Expense = Saving.

Here we have a problem. After considering all the expenses, saving would be the second priority. 

If we change the formula to Income - Saving = Expenses, saving becomes the first task to do after we earn salary,  wages,  bonus and other incomes. 

So separating immediately some portion of our income as saving would compel us adjust our expenses to a certain limit.  

Set a target for saving say 5% or 10% to begin with and slowly increase the saving percentage every year or as required.