If you have already started saving money, congratulations — this is a reasonable step towards a secure future. Ideally, your cash "airbag" should be enough for six months of life without financial income. But even if you make a profit every month and increase your savings, this does not mean that your strategy is perfect.
David Blaylock, a financial planner, analyzed common strategies for accumulating funds and gave some tips for improving them.
So, you pay your monthly bills, maybe spend a little on entertainment, and then everything that remains is sent to a bank account. Knowing that you, in principle, have money, you can spend more than you should, and then spend the funds intended for accumulation. In addition, it is difficult to set yourself a specific goal for accumulation, because you can never say for sure how much will remain after all the costs. Instead, you can try another way.
The very first bill to be paid after the salary is your savings account.
Make this your rule and treat it as a mandatory and most important part of the payments (of course, if you have enough money to pay all the other bills).
Create an automatic transfer of money from your bank card to a savings account at the beginning of the month or from each cash receipt. If you just set up such an automatic money transfer and forget about it, after some time the amount of accumulated funds will surprise you greatly.
So, you save money regularly — it's wonderful. And a savings account with a plastic card is very convenient. But there are also disadvantages here.
If you run out of money, you risk withdrawing your savings or even spending them on an unexpected, but very desirable purchase. And, most likely, you will do it, because it is very easy to withdraw money: they are always within reach, you don't even have to go to the bank, just use an ATM.
Open a bank deposit for 6 months or a year. So you will definitely not spend the money intended for storage. Just don't invest everything. Leave some amount on a regular savings account for emergencies.
When you have only one savings account, it seems that the money on it is accumulating quickly and there is enough for everything. If you save only for one thing, for example, for an apartment or for a vacation, then everything is fine. But if you have multiple goals, one bank account makes calculations difficult and you don't see concrete progress. It is more difficult for you to understand what you have enough money for, and what you will have to wait for.
As a result, it turns out that, having spent savings, for example, on vacation, you do not leave anything for a new car.
It is better to have several accounts, each of which will be dedicated to a specific purpose, for example: "at home", "on vacation", "for the education of the child". This way it will be much easier to calculate your finances and see real progress.
Some people do not save money on a permanent basis, but save large sums at once when a lucky chance falls. With this method of accumulation, feelings of abundance and guilt alternate. The latter is when you have to take money out of your savings. Disappointment from this can even discourage the desire to save money again someday.
It is best to set yourself accumulation goals and strive for them. Determine the specific amount of money that you need to save each month. If it seems to you that it can be increased without compromising the quality of life, do it. But! Contributions should remain consistent and the same.
Despite the need to have savings, you should not get too hung up on it and deny yourself the pleasures. They help us to stay happy and maintain mental health.
If you didn't have a month in which you could deposit money into the "emergency fund", postpone all other payments and pleasures until you can do it.
When your six-month "emergency fund" is replenished, Blaylock advises changing the strategy. Since small cash savings bring little money, it is worth thinking about longer-term investments at good interest rates.
