Saving money is vital. Perhaps you’re saving money to build your emergency fund. Or maybe your financial goal is to buy property? Whatever your reasons for saving money are, establishing healthy savings habits is essential to your financial success.
Are you looking for tried-and-tested savings tips to get you on track? Find them right here and reach your savings goals in no time.
1. Invest saved money
Understandably, you want to keep your emergency fund easily accessible, but what if you have saved more money and are not looking to spend them right away?
Well, then, it’s worthwhile to invest in financial products. That’s because with the current level of inflation, whatever you have earned this month, will most likely lose a few percent (or more) of its value the following month.
Investing in lower-risk products can help you earn a reasonable interest rate and battle inflation. There are many ways you can preserve your money’s value. For example, you can invest in bonds that are indexed to inflation.
2. Set up saving goals
So, you’ve decided to save some money. Great! But think about it — your determination can quickly disappear unless you set a clear action plan (and say ‘no’ to impulsive shopping).
Start by calculating how much you can save. Setting aside 10% of your income is a reasonable amount. But you can also save more if you are comfortable with it.
You should feel good about planning and sticking to whatever goal you set up.
3. Focus on being consistent
Beginnings are usually easy — you can set aside the right amount during the first month. However, keeping your savings habits consistent is not so easy.
In fact, it’s better to save a little but do it every month for years, instead of saving a lot during the first month and getting discouraged to continue.
That’s why it’s worth starting with small financial goals, checking if you can comfortably stick to your plan, and setting up new targets once you feel more comfortable following your routine.
4. Track your spending
You can’t reach your saving goals without knowing where your money goes. Saved money equals your income minus expenses. That’s why tracking how much money you spend is crucial — this is the first step to controlling your spending habits.
But instead of looking at your expenses just as a whole, ensure you understand how your spending breaks down into categories. You can use an Excel sheet or unique budgeting apps to access a more granular spending report.
5. Eliminate your debt
Saving money is extremely difficult if you pay out some debt — it can be your mortgage or a small loan.
There are two strategies for paying out debt — snowball and avalanche methods. According to the snowball method, you first cover your biggest debts by their euro amount.
This method works miracles for those who have a few debts and find debt repayment difficult. By repaying smaller debts fast, you can feel more determined to continue.
With the avalanche method, you look at the interest rates of every debt and start by paying off the ones with the highest interest rate first.
It’s up to you what way you approach debt repayment, as far as it works for you.
And those are our top tips for saving money fast. Check out this popular article for more tips.