According to experts, a person who knows how to raise money and saves a certain amount regularly and has a cash cushion, is considered financially literate. Yes, you can live, as they say, from paycheck to paycheck, but if something suddenly happens, for example, household appliances break down, illness - expensive repairs are needed, and many other unplanned expenses. And what to do in such situations? Many solve and close such financial problems with loans, signing up for monthly payments for a loan, while the income per month remains the same. That is, money becomes even less and needs do not disappear.
There are even situations when a person takes out another loan to pay off the previous one because they can't cope and a vicious circle begins, and debts grow like a snowball. It is the stable accumulation of money that helps to avoid such a catastrophe. You feel more confident and can look to the next day without fear!
Why is it important to collect money correctly?
It seems like you take this and put it away from every paycheck and that's it. But it's much more complicated. Human psychology is geared towards quick gratification, and accumulation strategies require discipline and the ability to properly manage your expenses. Saving is difficult, especially in our time, when stores are simply overflowing with goods for various purposes. And if you don't know how to save money correctly, the "stash" from the previous month will be quickly spent and we will again be left without a financial cushion.
The basics of properly saving money
So you don't know how to save money and where to start? The first thing you need to do is carefully list your expenses. Take into account all the necessary things, utility bills, food, transportation, necessary clothes. When the amount becomes clear, subtract it from your salary and see the free money. This is the indicator you can start saving. But we all know that sometimes you may want something tasty, sometimes you will see good discounts on a phone or things and it is very difficult to resist. Therefore, you need to adhere to several basics, namely:
- It is not necessary to save large amounts, it is better to save a little at a time, but on a regular basis.
- Try to refrain from impulse, unnecessary purchases.
- Don't take out loans, but rather save up, buy a little later, and then you won't owe anyone or anything.
- When you save, the money you save doesn't need to be touched and spent on regular visits to the supermarket.
Don't spend more than you need, for example, you definitely need a jacket, but in the store you see jeans or a sweater that you didn't plan on spending money on. If you have such items in your wardrobe, you should refrain.
Money accumulation strategies and the best tools for it
There really are effective ways to accumulate with which you can save significant amounts without experiencing severe discomfort and restrictions.
The first thing you need to start with is determining the amount you need to save, and most importantly, why you need it. Without a goal, it will be very difficult to do everything. Do you want a new phone? Let's say it costs 21,000 hryvnias, give yourself a deadline, for example, 3 months, and set aside 7,000 hryvnias each.
Strict savings are needed in cases where there are a lot of debts, but a person wants to deal with them all. Yes, then you should leave money only for essentials, and pay off everything else. Otherwise, you can use softer ones. savings tools and make them daily habits.
Cost optimization
Even in the case of a salary increase or a bonus, people are more likely to use food delivery, taxis, dine in restaurants, etc., in simple words, to dress up. That is, money for buying a car or nice clothes is not saved, but simply wasted.
You will be surprised when you give up your morning coffee at a coffee shop. On average, a cup today costs 60 hryvnias, multiply by 20 working days. We will get 1200 per month straight away.
Cooking at home is also much more economical than buying ready-made meals. Plan your menu for the week, buy all the necessary products and try not to visit the store at all if you don't have to.
After receiving your salary, you must immediately pay all bills, top up your mobile phone, internet, and utilities, and distribute the remaining money over the month, setting aside a certain portion for savings.
When saving, it's better to use cash, as it's easier to control what you feel.
Financial instruments
Nowadays, almost everyone will receive a salary on cards. Each bank has the opportunity to include a piggy bank and set deduction limits. One or two percent of all income, expenses or transfers. A small amount of money can accumulate significantly in half a year.
These are general strategies for regularly saving money You can also create a separate card account, remove the plastic card from your wallet and not add it to Pay Pass, and then make an automatic monthly payment to top up your main account, and look, a small 300 hryvnias will turn into 3,600 hryvnias in a year.
Deposits and securities act not only as methods of saving money they also provide passive income. This is receiving interest every month or once a year or six months. First, you have money set aside and you can't just spend it, and second, you can avoid spending interest and increase your profit. In such cases, you should definitely consult with financiers, because the market is risky.
Simple stress-free life hacks
It's hard to count 5 or 10 thousand at once, and you almost don't notice small bills. Today there are many interesting piggy banks, they are beautiful and have special pockets and drawers with the denomination of the bill, 10,20,50,100, 200 hryvnias. Put small money there, change from purchases at the store. Have a lot of small bills accumulated in your wallet? Move them to the piggy bank, and after six months, having counted everything, you may be surprised at how much you have accumulated.
You've finally closed your loan! Are you used to monthly payments? Continue to make them, but only to your own account, motivating yourself with the next purchase.
The 80/20 rule is known all over the world. This is when you spend 80 percent of your income, and save 20 from any amount, even from small salaries. If it is really difficult, set the bar at 10%. A small salary of 10,000 UAH, if you put one thousand in reserve every month, then at the end of the year we get 12,000 UAH.
Envelopes. A very cool method. Start several, one for utilities, another for everyday needs, a third for savings and a fourth for unforeseen situations. This way, everything will be calculated and analyzed in your head. Before taking money out of the envelope, a person will think several times. When there were no illnesses or other unpleasant incidents, great! These funds can already be transferred to the main savings envelope.
How to increase the efficiency of savings? The answer is simple! The more you earn, the more you can save, provided you spend wisely. Look for new sources of income, develop yourself to get the desired position and salary.
How to choose the best tools for saving money
Everyone decides for themselves which method to choose, several factors influence this choice:
- The amount of money that needs to be collected.
- Terms.
- Necessary expenses taking into account all family members.
- Presence of existing debts.
- Income level and financial literacy.
- Goal.
It is not necessary to choose only one tool, you can save a little cash, buy a piggy bank, and set a small payment on a savings account, and all together will make a tidy sum of savings in the required time. Now you know how to save money for the future correctly, and what could harm this?
The most common mistakes when saving money
We should not forget about human psychology, their fears and doubts. What if I don’t have enough money left? I don’t want to limit myself too much, the habit of eating fast food, the desire to gain a status that does not correspond to the essence – these are branded things, expensive phones on credit and many other things. And the main question: why? Without motivation, nothing will work. You need a clear goal that is achievable, has its own deadlines and is specific.
Dreaming of a vacation abroad? Motivate yourself with your desire, live with a purpose. Just imagine what kind of impressions you can get, how to relax, feel a different mentality and see different countries. And a home dinner instead of a restaurant and a pair of high-rise jeans in your wardrobe are not enough, right?
And the main mistakes are as follows:
- Saving before my salary, that's what I'll save. No! That won't work and it's unlikely that there will be anything left, at best, very insignificant money.
- Receiving money into a savings account and spending it immediately is not income.
- If you put off a lot at once, motivating yourself with strict restrictions, in 90% they start pulling from the envelopes after a week, because there is not enough, and the person is not ready for such strict measures.
- Paying off debts immediately and being left with nothing will only lead to further loans, and what will you have to live on? Everything must be done according to a clear plan and in stages.
- Bad habits, from smoking and alcohol to impulsive spending and shopaholics. This is a different topic and requires specific help, but still these problems take away from 30 to 50% of total income per month.
Think about it for a long time how to start saving money It's not worth it, you need to start as soon as possible. Thanks to this, you will not only learn to manage your finances, you will gain discipline, feel confident, and conduct a thorough analysis of your expenses, many of which will turn out to be unnecessary and unimportant.
Saving money is an art! You can't save on health, education, and safety. Education will help increase your income in the future. It's not worth buying second-rate and very bad products for cheap, so you'll save a little, and then give it all to doctors.
