According to data published by the National Institute of Statistics (INE) out of every 100 Euros that enter Spanish households, only 6,5 of them are used for savings through financial instruments such as pension funds, savings banks or deposits. And it is that such an important habit can often be stopped by daily expenses, unemployment or wages that do not allow to make ends meet quietly.
It is also estimated that approximately 58% of the Spanish population goes into debt in one way or another to get out of the month. Although we cannot deny that for many people it is difficult to have an economic balance for various reasons, it is also true that there are always strategies and methods to start saving, not to mention the many advantages that come from having an economic section for emergencies or for the retirement.
Why save?
If you have a stable income that allows you to cover all your needs without any problem, you may see savingor as something unnecessary and that will only take away some money that you could use immediately. However, saving not only will allow you to obtain long-term benefits, but also you will be able to find in this habit a support that will allow you to sleep peacefully knowing that you are forming an economic mattress that can support you if necessary.
We must not forget the high unemployment rate that affects the Nation today, not to mention the disadvantages of always living depending on credit cards or personal loans. Save money It will allow you to face the economic obstacles that you may face in your life, at the same time that it allows you to make your dreams and projects come true without having to go into debt for years and end up paying more than you should.
Savings advantages
- Long-term savings plans such as pensions will allow you to have financial stability and lead the same life you are used to once you have stopped working. Whether due to age, illness, injury, unemployment, or any other reason, it is always advantageous to have a backup that allows you to live peacefully.
- You will not have to depend on the interest rates and fees to pay to fulfill your projects, since you can pay them in cash with your savings. The most important decisions of your life such as your university tuition, your wedding, your house or any other assets can be yours if you start saving as soon and efficiently as possible.
- You will always be prepared for emergencies. Unfortunately none of us are free from suffering an accident, illness, or any other situation that makes us economically vulnerable. This is how we cannot deny that having a backup will allow us to sleep peacefully at night, knowing that we are protected.
- Saving is much easier than you might think, and you will see that you will not have to cut too many expenses to be able to do it correctly.
How to start saving?
It may seem at first that saving is an impossible task to which only people with very large incomes have access. The truth is that this is not the case, and all people can learn to save, it is simply a matter of knowing the destination of our money and learning to organize ourselves in the simplest and most effective way to allocate a part of our income to savings without neglecting our monthly payments or our lifestyle.
Here we explain how you can achieve this:
On their own
Saving is not synonymous with cutting expenses, but redirecting them in a way that can be much more useful in the short and long term. It is not a difficult task and you will only need a pencil and paper or a spreadsheet so that in a few minutes you can find your savings plan for the month and the year.
Follow the steps that we describe below to achieve it:
- The first step to make your savings plan is to write the amount that we have on a monthly basis. We can define income as the monetary amount that a person obtains in exchange for their work or as a product of the performance of an investment made. That is, they are all the income of money that we have per month.
- Then we will list all the expenses that we need to survive normally and which we cannot do without, such as rent, mortgage, car monthly payment, registration, house services, etc. These will be the fixed expenses, and monthly they are similar or vary very little.
- Later we will list the expenses that we usually make but that are not essential for our day to day, such as outings, impulse purchases, gifts, leisure, or ant expenses. The latter are those expenses that we do not take into account because they are very small, but accumulated can add up to a large amount. These expenses are known as variable expenses since by not having them contemplated they are different from month to month.
- Finally, list all the payments that you must make annually and that are essential. These can be the insurance payment, the income statement, or even vacations if you consider them necessary. Divide this amount by 12 and add it to the list.
- Add your fixed expenses, your variable expenses, and the result of your annual expenses by 12. Compare it with your monthly income. Is this amount more or less?
If you have observed that the amount of money you spend is greater than what you earn, it is likely that you live depending on credit cards and personal loans. Although these instruments are useful to get out of trouble from time to time, it is not advisable to always be depending on them to survive, since we will simply be increasing a debt that little by little will become very difficult to pay.
It is time for you to analyze the list you just made and decide what are the things you can do without to redirect your money towards savings. A good way to start is by analyzing how much money you spend on eating out, how much you spend on impulse purchases or things you don't really need, or how much money you spend on leisure activities. You will see that with just a couple of months that you do without these things you will be able to pay off your debts and start saving effectively.
You must do the same procedure if your expenses are equal to or less than your income, with the difference that you can immediately start creating a money section that you pay attention to at once and that you immediately place in a savings account at the time of that you get your payroll. Little by little you will see how this account grows and becomes a very useful and effective backup to face any situation in which you need emergency money or to make all the projects that you propose come true, such as getting your house, changing your car , continue with your studies or whatever you propose.
By means of an automatic financial instrument
If you are a salaried employee, you have a fundamental advantage since you can hire one of the many financial instruments available in the market that will help you create a habit of saving without you even realizing it. Automatic savings plans work by deducting from your payroll an amount that you have previously established, and depositing it in an account that you can only access under special conditions, such as unemployment, emergency or retirement.
Very surely in your work they already have a similar system in which you are already quoting or to which you can quote just by asking for it. If not, you can go to the bank that domiciles your payroll or any other that you trust, you will see how you will find a large number of options and the attention you need to select the savings plan that best suits your particular situation. .
It is best to do both saving methods, separating and classifying your monthly expenses at the same time that you hire an automatic savings plan like the ones described above. You will see that these two simple measures will make a big difference in your personal finances.
Final tips for saving
• If you find yourself in the situation where you simply cannot stop making any payments, prioritize which are those that are most essential. You may not be able to avoid paying the rent, but you can hire a cheaper internet connection service. It may also be that you can not get rid of paying the monthly rent for the car, but if you can walk every time you go to nearby places to exercise, help the environment and save money.
• Also analyze each of the elements that make up your variable expenses. You will surely find things on your grocery list that you don't really need and that end up expired in your fridge. You will see that you will find many ways to reduce your expenses and start saving effectively.