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Savings: The habit that builds a solid financial future

Saving is an essential habit to have a stable financial life and achieve long-term goals. Just like going to the gym or taking care of our diet, it requires consistency and discipline. Although it can be challenging at first, seeing goals accomplished motivates us to keep saving. But how do you get started without trying?

Strategy: Set aside a fixed amount each month and put it away immediately

The key, according to the experts at HelpMyCash.com, is to set aside a fixed amount for savings each month and set it aside once your paycheck rolls around. It’s not about saving what’s left after paying monthly expenses, it’s about incorporating the savings into our budget. For this purpose, we can set aside, for example, 100 euros per month. This prevents the expenses from seeming endless and allows us to move towards our goals.

Bank accounts: A tool that increases your savings

To make the process more efficient, experts recommend opening a bank account exclusively for savings. These accounts allow us to separate the money we allocate for our daily expenses from our savings, avoiding the temptation to spend what we have saved. In addition, many of these accounts offer returns that allow us to grow our savings without additional effort and with minimal risk.

There are currently accounts with no fees or requirements that can offer returns of up to 3.25% APR. In addition, these accounts are insured by the Deposit Insurance Fund, which covers up to 100,000 euros per bank and holder.

How much to save? The importance of budget personalization

While there are general rules for allocating a percentage of our income to fixed, variable, and savings expenses, it’s important to remember that every situation is unique. Rather than following a rule to the letter, the key is to create a personalized budget that sets a realistic and achievable amount. This means that there is no point in committing to saving €300 a month if we later face difficulties in covering our basic expenses.

Budgeting consists of recording our monthly income and expenses in a spreadsheet. We then analyze our expenses over the past six months and define how much money to allocate to each category each month. For example, we can allocate 500 euros for rent, 250 euros for grocery shopping, 200 euros for leisure and 100 euros for savings. The most important thing is that the amount designated for savings is realistic and sustainable in the long term.

Specific objectives: Motivation to save

In addition to a personalized budget, it is essential to set specific savings goals. Whether it’s a trip, buying a car or saving for a mortgage payment, clear goals motivate us to keep saving. If these goals are medium or long-term, experts also recommend taking advantage of term deposits.

Currently, there are one-year deposits that offer returns of up to 4.40% APR. Previously, to achieve this profitability, it was necessary to take risks and invest in stocks. However, in the current context of high interest rates, European banks offer attractive fixed-term returns, providing an opportunity to grow our money without taking large financial risks.

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