Answer These 9 Questions To Finally Start Saving Money

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How to Save Money

Are you really saving money? Be honest with yourself if you want to find the key to financial well-being.

1. How much do you spend?

To save money, you need to earn more and spend less – this is a common truth. The first one does not work out for everyone, and the second one is underestimated by many. Often there is an illusion that money is only enough for food and a communal apartment, so there is simply nothing to save on. But do not rush to conclusions.

If you have not taken into account all-all incomes for at least a few months, you have no idea how much you spend and whether you can save.

It is necessary to fix expenses to understand their structure. Moreover, doing it with a “big brushstroke” is not enough. For example, you entered all the expenses in the supermarket into the “Products” category and consider them justified. And then it turns out that only 30% of the amount was spent on meat, cereals and vegetables, and the rest – on chocolate, cookies, soda, and alcohol.

Start keeping records – you will learn a lot about yourself.

2. How much do you get?

The easiest way is to multiply the salary by 12 – according to the number of months – and calculate the annual income. But the figure will not be entirely accurate. Their adjustments made by selling , which are considered at the average wage. You may have received a premium or tax deduction for the year. It is worth considering all the nuances in order to understand the real situation.

3. How much money do you need for the most necessary?

Determine which expenses are mandatory for you. Then estimate your expenses based on several strategies, for example:

  1. What is the minimum amount you can live without fasting and getting into debt?
  2. How much do you need to live without limiting yourself, but also not blinding?
  3. How much money is required to live luxuriously?

The optimal strategy is second. It helps to maintain a balance between restrictions and comfortable life to save and save wisely. The first figure will help you see your real needs, and the last – to understand what you need to strive for.

You can simulate any number of scenarios for yourself. The main thing is to understand why you are doing this.

4. How and why to keep the budget and start saving money?

How and why to keep the budget?
Keep the budget and Start saving money

Information on income and expenses in itself is interesting, but useless if you do not let it go. These data are needed to draw up a budget for the month and year. A detailed financial plan will help to take into account all large and small expenses, to lay funds for entertainment and force majeure, and, of course, to start saving.

5. How to Start Saving Money without affecting the quality of life?

Some approaches matter radically. Some decide to tighten their belts more tightly, to buy the cheapest, to limit themselves in everything. And this is a mistake. Life will become unbearable, and this is not at all what you should get along with savings.

If you have gone the extra quarter to buy familiar products cheaper, that’s good. If you replaced high-quality meat with a cheap semi-finished product with a slurred composition – this is bad.

6. How much do you need to save?

Here a lot depends on what you save and whether you have savings. The first thing you should take care of is the reserve fund. This is an airbag that will help you out if you lose your job, a long illness, or other force majeure. Savings should be enough for at least three months of normal life, and ideally for a year.

For the rest, you set yourself financial goals. But they must be clearly formulated, and the path of accumulation – calculated.

7. What do you need to save now?

This question logically follows from the previous one. In the case of savings, there are sprints, but there are marathons. First, you collect a small amount of money to spend it in the next couple of years. In the second, you pursue more long-term goals, which must be postponed for now.

For example, it would be naive to hope for a large pension from the state. It would be more logical to save up for old age independently. The same is with the education of children. Maybe, by their full age, universities will not have budget places in principle, so you need to prepare financially.

Often people wave to their long-term goals: “Suddenly I will limit myself now, but I won’t live up to retirement.” It will be much sadder if you still survive, but there will be no savings by this moment.

8. How much money to save?

Save at least 10% of all income. It is better not to fall below this bar, otherwise, you will save up for ages. But you can increase the percentage if finances allow.

If you don’t know where to start, try to save 10% from salaries and 25% from random receipts: bonuses, cash gifts and so on.

9. How to store savings?

Especially when it comes to long-term savings, otherwise inflation will slowly but surely devour your money. For short-term purposes, it is worth considering savings accounts and deposits. Over long distances, it is better to invest. Money should work and be profitable, it’s a shame not to use their potential.

Take the time to learn investment tools and avoid dubious businesses that run the risk of leaving you penniless.

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