We are in what is probably the time of greatest spending of the year. Once the Black Friday is over (which in some cases lasts for a week), the Christmas campaign arrives, with associated expenses that come with food, gifts, and so on.
Although it seems paradoxical at a time like this, we will propose to save, but not in any way. Let’s do a step-by-step guide, so that it’s easy for you to follow . As they say, everything is starting, and with a method, it can be achieved.
Is it really possible to save?
Many people are unable to save . It is not because they do not raise it, but because they perceive that the money they earn is not enough for it; In fact, more than 70% of Spaniards say that this is the main reason for not doing so.
Although this may be true in some cases, it is also true that more than 65% of Spaniards say that their finances are unforeseen, and more than 40% admit that they prefer to indulge before saving.
In any case, the fact is that, as we will see, it is always possible to do a better management of our finances.
Can you save a euro cent? Although this question may seem like a truism, simply following the penny method , you would save more than 600 euros a year. So … do not tell us you can not save. Come, are you already convinced? We continue
How much to save
This is the first question we must answer. You are no longer considering whether you can save, but how much you are going to save each month. We are making progress!
Of course, not everyone can reserve the same amount of money, it depends on your income and your expenses (and what is essential or not).
We are going to offer you, as an orientation, that you save 10% of your income. How? What you can not? Are you sure? Keep reading, we will offer you guidelines so you can get it. But, first of all, just imagine that your income, for whatever reason, is reduced by 10%. Would you be able to adapt? You would have no choice, so you are probably able to do it in the current situation.
With these first savings that you generate, the first thing will be to set up an emergency fund , which will help you to deal with those unforeseen events that may arise : an accident with the car, a broken appliance … or a decrease in income, with the that we did not count.
As an orientation, the emergency fund can be measured in months of financial freedom . For example, if you have a level of expenses of 1,500 euros per month, with 9,000 euros you will have six months of financial freedom.
The importance of pre-savings
Related to all the above, there is a concept of which we have already spoken on some occasion, the pre-savings . Most people think about how much they can save once all their expenses have been deducted , in this way: I have paid 1,500 euros, I have spent 1,400, this month I can save 100 …
This way of doing it has a problem, and that is that there is a tendency to spend what there is, and in this way it is difficult for it to be over. A few months will be saved and others will not , and in the end you can only do it from time to time – hopefully – it is not systematic.
Actually, the best method to do it is just the opposite. First, dedicate a part of our income to savings . And then, from what we have left, we can spend. How to do it?
We look for a current account without expenses , from which to operate, and we give an order to the bank so that every month it makes a transfer to another account, which will be the one that serves as a savings account .
This account, which can also provide us with some profitability, will be separated from any type of current expense (which will be linked to the main account), and will help us to build our emergency mattress, and even to have the money with which we can then invest and get some profitability.
In this way, we are going to plan our expenses only with the money we have left after discounting the savings, which avoids the temptation to spend it.
Plan and control your finances
A prime issue when it comes to saving is planning . Make a budget of expenses , and discover and control how you spend your money.
If you set up an alert system in your bank account, you will have better control of your finances , since you will avoid discoveries, you will know the movements through e-mail or message to the mobile, and you will know when you have reached a certain level of monthly expenditure , or when the balance you have in the account is below a certain level.
There will be a series of monthly expenses, more or less fixed (housing, car, food, electricity, gas …) and others that are necessary, but do not have that monthly frequency (for example, insurance). It is important to have control of your bills , to verify if what they charge in your account is correct, or you are simply spending too much on some issue.
In addition, you will have other expenses that may not be as essential as you thought, or perhaps you will simply discover that you are spending a significant monthly amount on something that you could eliminate.
Control small expenses
Those expenses that are usually paid with “a few coins”, but that can make a considerable break in our economy, when we add up what we spend. As an example, smoking, taking several coffees a day, or having breakfast outside the home, can mean an important monthly volume of money, of which we are not totally aware, because we are spending small amounts. But these are just examples, there are many cases of this style, and each one can have its own.
Invest to get a return on your savings
Although this section departs slightly from the intentions of this guide to start saving, it would not be complete without mentioning the investment. That is, what to do when we already have a remnant. And it is that, once you have managed to save, it is about getting a return for your money or, at least, not losing value , because, you know, having the money under the mattress is a good way to lose it .