Saving is not something easy, and even more so if unforeseen events come to us or there is no significant income. Fortunately, information on personal finances is today more democratized than ever, causing more and more people to put their household accounts in order to at least be aware of where they spend the most money and what they can do to prevent it.
This has come seasoned with a lot of challenges and strategies that we can follow, some with very seductive names. In the end, it is about choosing the method that is simplest and easiest to maintain over time. Here we summarize the best.
The 50-20-30 savings method
You have alternatives if you do not want to make a classic budget. For example, you can explore the possibility of structuring income based on. Under this budgeting approach, we spend 50% of our income on housing, food, and other basic needs. 20% goes to savings, and the remaining 30% can be spent however you want.
Pay yourself first (and your savings)
If we want to save, a good idea is to start by allocating savings as an expense, subtracting it from our income as soon as the month begins. This is what methods proposes, which aims to assign each euro that we enter to an expense (or a saving).
Having a separate bank account for savings with scheduled transfers is a good starting point so there’s no chance to think about it.
21 days of ‘financial fast’
This formula is somewhat more aggressive. In her book ‘The 21-Day Financial Fast: Your Path to Financial Peace and Freedom’, financial adviser and Washington Post columnist Michelle Singletary describes “financial fasting”, a kind of ‘financial diet’ that promises to do away with the bad spending habits, create a plan to get out of debt, and put yourself on a better financial path for the future.
During the financial fast, no unnecessary money can be spent in any way. Unless it’s food, lodging, or any other essential survival expense, spending discipline must be in place during those three weeks.
The 52-week challenge: get a minimum of 1,400 euros
The call is a simple and effective way to get used to saving progressively. His promise and objective is clear: at the end of the year, we will have an extra 1,378 euros for emergencies or to reach an extra expense.
In its simplest and most affordable version, it means forcing us to save one euro the first week, 2 the second week, 3 the third week, and so on until we save 52 in week 52. You can save more each week if you have capacity, but the challenge is to gradually increase.
Facebook Comments
Disqus