If you are financially literate, you should know that you don’t have to own a business to manage a budget. The organization of the resources you spend and receive should be a guiding principle in your everyday life to ensure that things are going in the right direction. Ideally, at the end of the month, you have made ends meet with dignity and have successfully planned the next one. Your private organisational system should also cover your long-term needs – yet no one can guarantee that in a year the size of your income will be as you have predicted. That is where saving techniques come into play – each of them should ensure that after a while your efforts will be rewarded and you can benefit from the fruits of your labor as you think best. Here are three time tested ways to save:
Create a budget
The first thing you need to know is where your money goes every month. Write down all your expenses – contributions to home loans, leases, household bills, clothes, food, coffee, car fuel … Use the receipts received over the past four weeks to help with the overall calculation. When you have the numbers, it’s time to sort them by category and create a budget. This will allow you to compare your revenue with your expenses, plan the latter, and restrict your overheads. Keep in mind that some costs are regular but do not occur every month, such as car maintenance. Review your budget and check your progress every month. Not only will this help you stick to your savings plan, but it will enable you to quickly identify and fix the problems.
Pay yourself first
What does this mean? Open a savings account and transfer between 10% and 15% of your salary there each month. If your costs are so high that you can not afford to put 10-15% of your income aside, it’s time to think about reducing them. To do this, find things you can spare for the time being – like eating out, new clothes, or fun with friends. Try to look at the money you save, as you look at the cost of food and water – it is mandatory. If necessary, set automatic transfers into the savings account and do not think about it anymore. Or just set a saving goal – a wedding, a vacation, a new home, a car, your children’s education, retirement or an emergency fund in case of sickness or unemployment. In this case, it is useful to predict exactly how much money you will need and how much time you will need to save it – that will help you determine your savings plan.
Invest your savings to increase them
You may prefer to make a bank deposit instead of a savings plan – so you stash your money away in a bank for a certain period of time and you benefit from the interest. However, if you prefer a higher yield, one of the most up-to-date tools to achieve it is P2P investing. The method connects investors and borrowers, and offers many more benefits than conventional banking, as everything happens entirely online. This allows for transparent and controllable investments. In the worst scenario, your savings will remain intact due to the existing buy-back guarantee provided by the originator, and at best – you will earn much more than by just depositing your money in a bank. The average annual return of iuvo investors for 2018, for example, was 9.2%. However, with proper capital structure and management, return on investment through iuvo may reach 15% on an annual basis. Get to know the platform, create an account, and then an investment strategy and finally move to diversifying your portfolio. And how would you know if your portfolio is balanced? Do not be afraid to seek help from us here.