Are you one of those who arrive at the end of the month and have not managed to save even one dollar? Here, I am releasing an infallible system on how to save money every month.
Every month the same: you work, you charge at the beginning of the month. You pay bills, general expenses, some caprice, and at the end, you stay at zero … And the next month again to start.
And it does not matter if the income is high or low, at the end of the month very few people can save. But if the cause of not being able to save is not the level of income, where is the problem?
In this article, I am going to show you a simple way to manage your finances with which you will be able to save more money every month.
In a natural way, and without hardly realizing it, you will be fattening your savings account month by month.
How to save money every month?
Saving is of vital importance to anyone.
Our parents, and even more so our grandparents, were educated with the healthy habit of saving as much as possible “for what could happen.” However, in today’s society, we have lost that habit of keeping and thinking about the future.
Today the story has changed. Today we live in the culture of having everything, having it already, and often have it on credit. What has been saved for a while to buy something or save for the future has gone out of fashion? This current way of thinking is affecting the economy of many people and families.
Entrusting everything to credit, and having a short-term mentality, is disastrous for personal economics. It is vital to change financial habits and guide them towards saving if you want to improve economically, and for this, you must change the mentality about money.
In Asian countries, they have a profound culture oriented towards work but also aimed at saving. In China, people save 40% of their salaries on average, and when the population of a country saves that amount of money, that country usually does well.
Having the right amount of money saved will provide a series of personal benefits, among which are these three mainly:
Have a safety mattress. Having a collected amount of money allows you to face life more calmly and safely. In case any unforeseen circumstance happens, such as a dismissal, a salary decrease, an unplanned expense, a disease … you can always make use of your saved money to deal with that circumstance. For that reason, having that mattress of money gives you security and tranquility.
Happiness. A right amount of money saved will also make you happier. When you have a heritage behind you that supports you, you feel more secure, and you lose your fear. You can launch without so many worries towards a job change or a personal project. You enjoy other opportunities that without that security, you would not be able to take because of fear.
Invest. Having money saved allows you to invest it and make it grow without having to work more for it. Money is a raw material that is used to create assets that generate more money, so the first step to wealth is to save. The savings will help you grow your money, and with the investment, multiply it. The more money you save, the more capacity to make it grow you will have.
As you can see, the benefits of saving are enormous. Keeping a part of your income gives you some possibilities that you do not have if you live a day and you are not able to save some of your money. And to achieve all this, you need an effective savings system.
Pre-saving: the infallible savings system
The pre-savings system is straightforward to understand; it consists of taking a part of your salary charge it and deposit it automatically in your savings account. And so every month.
As simple as that.
You can ask your bank to collect money from your payroll every month and deposit it into your savings account.
It is an automatic system.
And why do this?
Well, to avoid temptation. The pre-savings what you get in this way is that you do not have that money from the beginning and so you do not have the temptation to spend it.
Human psychology has some peculiarities: if you know that in your current account you have money available, you will spend it. It’s like that, and you know it
In this way, with the pre-savings, by having the money “hidden,” your brain will not count on it.
It is an automatic savings system, and with it, you will save more, more constantly and for longer.
“But if it’s hard for me to make ends meet, how the hell am I going to pre-save?”
As a general rule, everyone thinks that money is fair and that it is impossible to save anything at the end of the month, but that is not true.
If you earn more than you make now, you would also spend more. In the same way, if you save some money at the beginning of the month, you will get used to living with less.
If you think you arrive very right at the end of the month, you can start by pre-saving a small amount of money. Start pre-saving 20, 30 or 50 dollars.
Little by little, you will see how it is possible for you to continue living practically as before without too much effort. Surely you almost do not notice the difference.
Over time you will realize that you are saving more and more money and that will motivate you to gradually increase the amount.
The critical thing in this pre-savings system is that you are constant, that every month you automate the transfer of money to your savings account and that you try to increase the figure over time.
At the end of the day, if at the beginning of the month you pay for the phone bill, the gym, the community, the car insurance … why not pay yourself first? Are all those companies or services more important than you?
So you know, the day one of each month, when you enter your payroll, take the amount of money you have chosen and give it to the most important person for you: yourself.
Be the first to receive your share.
And do not forget that the more you save, the more you will enjoy the benefits that I mentioned at the beginning.
The savings for your future, for your security, for your investments, for your happiness, are the most important for you, much more than any receipt that you have to pay, for that reason you must always pay yourself first.
Difference between saving and pre-saving
The main difference between conservation and pre-saving is that, with the first system, you keep the money that you have left after spending. With the second, you spend what you have left after saving.
As you have seen, there is a big difference, especially from the psychological level.
But there is still something else you should keep in mind.
Many people are saving a part of their income little by little. They are people who manage to save some money at the end of the month and put it into a checking or savings account. This is what most people usually do — the typical way to save.
What is the disadvantage of this type of savings system?
Let’s see. Some people are able to save at the end of the month by reducing their expenses and depriving themselves of some consumer whims, however, when they see that their savings account is sufficiently swollen thanks to savings, they can not avoid the temptation to buy goods from consumption even higher and more expensive.
These people avoid petty whims every month, but in the end, they squander all their savings at a much higher consumption expense.
A motorcycle, a new mobile, a luxury vacation, a more modern car, a significant reform at home …
This can not be called saving. It is merely postponing the expense to buy something more expensive later.
Be careful, if any of those things is your saving objective, and you need it, perfect; but many times you see yourself with a large amount of money in your account, and you throw yourself into a large purchase on a whim, acquiring something you do not need.
The human psychology returns to play us here a dirty trick.
Buy a motorcycle that you do not need just on a whim, change mobile when you have the same service, buy a new car for a purely emotional issue, an unnecessary reform at home but that will leave your visitors dead …
Large-scale consumerism You can avoid small whims month after month, but when you have right amount of money you cannot prevent more expensive caprices.
And in the end, that way of saving becomes useless. It’s still consumerism, not saving.
The purpose of this false saving is not to think about the future or to create a heritage. It is to spend it on more significant and more expensive goods or luxuries.
The pre-savings must be conceived in another way. In addition to being an effective way to save money, this money should be seen as an instrument for the long term, with a different objective than buying things. It must serve to achieve the benefits of which I spoke to you at the beginning of the post: generate a heritage, have security, happiness, and have a raw material with which to invest.
That is why it is so essential that, with the pre-savings, the money that you save is destined to an authentic saving. To keep it thinking in the long term.
It is fundamental that all this is recorded in your head. Never forget what the ultimate purpose of the pre-savings is.
Why use the pre-savings?
As I have already told you, having the right amount of money saved gives you fantastic benefits. But of course, pre-saving a good number is a slow process. Also, you have to work for it and deprive yourself of various things.
For this reason, investing a part of the money you are pre-saving becomes an important task.
If having money saved is good, investing, and making it grow will be much better.
Investing you can increase your assets without having to work, without having to devote effort or time to it.
As you know, if you pre-store and invest, over time, you can increase your assets to a very high level, mainly thanks to compound interest.
If that small amount of money you save each month you deposit, for example, in an investment fund, and you are constant, tomorrow you can find that you have accumulated great wealth, and you will verify that you have generated a large amount of money. Money that has grown over the years practically doing nothing, only with the power of an investment.
You’ve heard it before: money calls money. The more money you can save, the more chances you have to make it grow with the investment.
As you can see, having the right mattress of money saved is fundamental, but investing it and making it grow is practically as important.