Most people at least once in their lives have had a situation where they urgently needed money, but there was nowhere to take it from. The main reason for this is the lack of savings. The fact is that, according to the State Statistics Service, less than 9% of Ukrainians save money. And the main reason is not only the financial illiteracy of many people, but also the ignorance of how to learn how to save money.
There are a huge number of different formulas for saving money, articles with personal experience from wealthy people, but at the same time there are very few really useful tips that anyone can put into practice. Let’s try to fix this situation. In this article, we will look at 8 really useful tips, thanks to which anyone can learn how to save and save money.
Council number 1. Pay off all debts first
Before you start saving money, try to sort out your debts. If there is, for example, a loan of UAH 5,000, which cannot be repaid in any way, which is why interest is constantly accruing, then first of all you need to close it. Thanks to this, one item of expenditure will disappear, and you can save a lot, because you do not have to pay interest on a loan to a card. The same applies to credit cards with a negative balance and interest-free loans online at MFIs. In any case, saving money should be started when there are no debts.
Council number 2. Try to save at least 10% of each salary
Experts recommend saving at least 10-30% of wages. Naturally, the more the better. 10 percent is not such a large amount as it might seem at first glance, because in two years in this way it will be possible to postpone only 2.5 monthly salaries. This is the financial cushion that any person should have in case of illness, disability, dismissal or unplanned expenses.
There is no exact answer how much percent of income should be set aside, since the level of income and expense items is different for everyone. But, if you can’t save at least 10-30%, then perhaps you just don’t have enough discipline. If money from the employer goes to a bank card, then you can simply open an additional account and transfer there a certain percentage of all receipts. In this case, you do not have to rack your brains every month and count how much money you need to set aside.
Try to save at least 10% of each salary
Council number 3. Set aside at least 50% of unplanned income
If you receive some kind of income that you did not initially count on, then it is better to postpone it in full. Can’t resist and save the whole amount? Then try not to spend at least 50% of it.
Unplanned income includes:
receiving an inheritance;
Return of an old debt;
Award at work
13th salary and so on.
Council number 4. Start keeping a ledger of income and expenses
Not all people are financially literate, and this is one of the reasons why it is often not possible to save money. But there is a universal way that disciplines, teaches you to value money and shows all unnecessary expenses. You just need to start a notebook or an exel file on your computer (whichever is more convenient for you) and start recording all your income and expenses. To do this, you can also use special applications that can be installed on your phone.
We went to the store – write down not just the amount spent, but write down how much money was spent on which product. Write down any expenses: utility bills, a cup of coffee bought at lunchtime, money for gas or public transport, and so on. At the end of the month, you should sum up the results and see where the most money was spent. We assure you that the results will surprise many. As practice shows, many people spend a significant percentage of their income on unnecessary things.
Council number 5. Estimate the annual cost of your habits
Just calculate how much it costs, for example, a pack of cigarettes smoked a day or a cup of coffee drunk every morning in a coffee shop. Take for example a cup of coffee, let the average price be 25 hryvnia. Let’s say a person drinks coffee only before work, which means, on average, 22 times a month. 22*25=550 hryvnia per month, and 6600 hryvnia per year. This is money that can be saved. At the same time, it is not at all necessary to deny yourself the pleasure of drinking coffee in the morning, you can simply not buy it in a cafe, but start cooking it yourself at home. This will cut coffee costs by at least 90%.
Many do not even think about the fabulous amount their habits cost. But if you sit down and count, you can be very surprised.
Estimate the annual cost of your habits
Council number 6. Refuse unnecessary and impulsive purchases
This advice is especially relevant for the fair sex, since, according to statistics, it is women who mostly make purchases impulsively (although there are exceptions), and sometimes buy things that they do not need at all. Try not just to live within your means, but to make only those expenses that are really necessary.
This approach will help to reduce family budget expenses by 15-20% per month.
Council number 7. Take money from savings only as a last resort
If you want to learn how to save money correctly, then first of all you should remember that savings can only be touched as a last resort. If $50 is not enough to buy a new phone, then this is not a reason to take this money from your savings. Money can be saved for various reasons, someone has a specific goal (to collect for an apartment, car, repair, operation, and so on), while others simply want to have a financial reserve in case of unforeseen situations. But, regardless of the goals, touching NZ (untouchable cash reserve) should only be a last resort. If there is no discipline, then no matter how much money you put aside, you will never be able to collect an impressive amount anyway.
Tip #8. Open a bank deposit without the possibility of withdrawing funds before the expiration date
It is important not only to know how to learn how to save money from your salary, but also to be able to manage it. So that there is no temptation to touch the deferred money, and at the same time they simply do not lie idle, they can be invested. The easiest and most obvious way is to deposit money in a bank for 1-2 years without the right to withdraw it early. The interest rate in hryvnia today averages 8-10% per annum.