The aim of savings should not be based solely on the ability of each person to maintain their standard of living with less money, but rather to create the conditions for savings to achieve all their personal and family goals.
Being able to manage money and set savings goals that can guarantee the next family vacation, the education of your children, your retirement or even the necessary purchase that you have not been able to achieve, is no simple task.
We All Have the Ability to Save Money
We all need to achieve these goals with the income we have. This is the truth…
We may think that not all people are born with the ability to save money and that even people who make good money can not afford to save money if they do not have such skills. Likewise, the secret is not to spend less or cut back on essential expenses, such as food, but on how you can manage the money you earn and how much you can save every month.
Increasingly, the ability to save money is purely psychological, and the training of psychological skills is halfway to the success of personal finances.
Saving Money Seriously
All money-saving proposals are valid and some even have more benefits than just saving money. One example is the sharing of cars between neighbors on the road to employment, not only saving money but also contributing to a better use of resources and the environment.
Saving money means having the psychological and motivating power to do so. We do not always have this strength and sometimes in a given month we are 100% saving strength and other months we have only 30% of that force. So saving money is owning something that encourages and motivates you to do it or simply creating the conditions for savings to happen.
So the secret to saving money is to create a savings goal and create the conditions for that goal to really happen. There are three simple steps that will save you money without having to waste your time analyzing your expenses and income and finding where you can save a few more euros each month.
Why and what to save money?
Knowing exactly why and what you need to save will allow you to set goals. If you need to save for the education of your children or for your retirement know that it is a long-term goal.
Similarly, if you want to save money to buy a certain appliance for your home you will be setting a short or medium term goal. So write your goals on a paper, including how much money you need to make each one of them and decide how much you need to keep each month to accomplish them.
Some goals may mean a hefty contribution to your monthly budget, however, do not give up and start saving for those goals even if you make a small contribution every month and you will feel an incentive to increase your contribution whenever you have a more Financial availability .
Open an Account for each Goal
Now that you know what your goals need to open an account to save your monthly contributions for each goal. You must be aware that each goal has characteristics that determine the type of account you need to open, such as:
- Short-term objective – You should opt for an account that also has a short term and that allows some profitability and monthly reinforcements;
- Medium and Long Term Objective – You should opt for accounts that have characteristics that fit your purpose, such as a savings account retirement for the purpose of retirement or a savings account for the education of your children.
However, you should always keep in mind that you need an account that allows a monthly contribution so that you can actually achieve the goals. Look for an account that has no associated commissions. If you want to know the best account for your specific case, we suggest you read our review of 8 banks, an analysis that shows you the best account to market order.
Make Everything Automatic
Now that you know the type of account you want and the savings objectives you have, go to your bank and know the characteristics of each account and only accept accounts that allow you to automate your savings
So whenever you receive your salary or deposit the income from your work you will make the contribution, first to your goals and you will not run the risk of being in a month of low penchant for saving. Automating means always saving 100% for your goals.