7 ways to save money
What could we observe not so long ago, in the midst of a pandemic, when many people were left without work or with reduced earnings? That’s right, it turned out that they simply have nothing to live on! There is no money to make do a month or two.
This state of matters was quite expected. We have talked more than once how financially illiterate most of our compatriots are. And one of the consequences of this is the lack of savings and contingency reserves.
And what was to be expected happened: total lack of money and another decline in the quality of life.
What prevents people from starting to save money and make savings? Is it possible, without the skills of dealing with finance, to save an amount sufficient for a large purchase or other spending, without resorting to borrowed funds? How can you save money without harming yourself and your family? Let’s figure it out!
What prevents us from saving money
There are hundreds of reasons for refusing to save. Some claim that they do not want to deprive themselves of benefits for the sake of a vague future.
Others are not ready to transfer themselves and their families to “bread and water”. Some may not notice how they make spontaneous purchases and waste money.
In order to justify themselves, people are able to come up with the most intricate excuses. But perhaps the main reason for refusing to save is the inability or unwillingness to look a little ahead. Those who save money expect to use it in the future, and those who do not live one day.
But the future can be fraught with many difficulties. Who in early 2020 could have guessed that they would stay at home for months? What successful business owner would have guessed that his business would be “stuck” for months of restrictions due to the pandemic? Who would have thought that someone would lose a stable job or salary would be seriously cut?
Perhaps, only those who had savings for a rainy day were able to remain in a more or less stable position. They were able to survive the loss of a job, a reduction in income and other negative events with dignity, having a reserve with them.
We hope that we managed to convince you of the importance and seriousness of such a case. Fortunately, there are enough ways to save up for something, even for the same airbag. The main thing here is to decide what to start saving for, and how to do it most effectively.
What can you save money for
Yes, for everything that you simply cannot buy on your salary! Of course, there is another option to buy something on credit, as most people do. But since we so often talk about the basics of financial literacy, we will repeat once again that borrowed funds are not a way to stability and material well-being, but a way into a debt hole.
In fact, you should have two types of savings if alongside the reserve, you want to achieve some other goal.
- Financial safety bag. This is money in case of emergency, the reserve that helps to survive troubles and unexpected expenses. Money from here is not spent on the purchase of a sofa or renovation, does not go to vacation. But it is quite possible to spend part of the reserve on urgent car repairs.
- Money for financial purposes. If you have one, then you can start saving for your goals implementation. The goals can be very different: from travelling to new furniture, your personal interests come to the foreground.
Reserve and money for financial purposes should not be confused. These are two different capitals, which have their own purpose.
So, we have decided on the goals, now is the time to find out what methods exist in order to save money most effectively.
7 well-tried ways to save and set aside
We tried to collect the obvious and not too much ways to help you start saving money.
Put aside a fixed percentage of income
This is one of the most popular, efficient and working ways to make savings.
- Every time money falls into your hands – salary, advance money, payments, other income – some of them are immediately transferred to a separate card or account. With the leftovers, you are free to do at your discretion.
It is believed that to create an airbag, it is enough to save 10% of your salary every month. As for financial goals, it is worth calculating in advance how much you will need to set aside each month for their implementation, and set it aside right away.
People make one of the common saving mistakes by doing the opposite.
Putting aside leftovers at the end of the month.
- If you are not ready to share your financial affairs into the public eye, ask a loved one for help. Some kind of competition in the rate of accumulation with a friend or relative is also good for stimulating action.
It’s good if you agree upon award. For example, if the goal is to accumulate fifty thousand rubles in six months, and one of you reached the goal faster, the award is given to the winners. The one who fell behind does not receive a prize.
Simple method of «zeroing out»
This method is both simple and working. And while we encourage everyone to start budgeting and keeping track of their finances, in this case, you can do without budgeting.
The essence of the method lies in the daily zeroing out of cards and accounts in the evenings. You come home from work, look into your accounts, into your wallet, and “dump” the surplus to a like amount. It is good for Russians to zero out to two zeros.
For example, if there is exactly 1549 rubles in your wallet, put the change in the piggy bank so that 1500 remains. If there are 874 rubles on the card, then transfer 74 to a separate account or deposit. So you do not deprive yourself of funds, and you replenish your piggy bank regularly.
If you forgot to check your accounts some day, do it the next day and add another 100 rubles of a fine to your savings. It would seem, how much can be saved from small change? People who have experienced this method say that there can appear a decent amount.
Methods of distributing money “in piles»
Also a working option, as the experience of thousands of people shows. How does it work?
Having received your salary, immediately set aside 10-20% for financial purposes or a reserve, and forget that this money can be spent.
Subtract the amount that is required for the mandatory monthly payments from the balances.
Finally, we divide the remaining funds into 4 “piles” or envelopes according to the number of weeks in a month. Accordingly, every week you can spend money from only one envelope.
Of course, this method requires special discipline, so if your financial personality type is difficult to classify as disciplined, it will be quite difficult for you to follow this method.
Postpone what you have managed to save
This is also an option, especially for those who themselves do not notice how they spend their money on trifles. If you buy a glass of coffee every day, giving up on it, you can put up to 200 rubles into your piggy bank.
The same can be said about cakes during lunchtime, another paper fashion magazine, unnecessary subscriptions to applications.
The most important thing is the amount that you managed to save, put in a piggy bank, and do not spend on something else. In the West, this method is called the “Latte Effect”, try it, perhaps it will work just for you.
«Freedom Foundation» method
A popular method of creating savings on the Internet today – is the «Freedom Foundation».
The point is to save a certain amount each week. Draw up a schedule beforehand, where the amounts and dates of the transfer are prescribed. The secret is in the amounts: they should have a difference in one hundred rubles.
For example, if you start to form your freedom foundation from one hundred rubles, then the next week is already two hundred rubles, and the next – three hundred and so on. You can save one hundred rubles more every week, or you can write out all the amounts for a given period, say, from 100 to 2000 rubles, and every week you can choose what amount you can put aside. For example, this week you were able to put 1,000 rubles in your piggy bank, and next week you managed to postpone only 300. In a word, the scheme is simple, but working.
If you are interested in finance as much as I am, I invite you to the training events of the Academy of a Private Investor. Register in your Back Office right now and find out the details of effective training!