Money Tip of the Month: The Key to Saving More Money

Saving isn’t always easy

Let’s be honest, saving money isn’t always easy. Housing prices are sky high and there are loads of awesome things to do. It’s easy to overspend in the heat of the moment and end up at the end of the month with virtually no savings.

Save for a goal

Studies have shown that people are more inclined to save when they are saving for a goal. This creates a more tangible and personal reason for why you’re saving. It’s important to decide how much you need to save and for what ends. Your savings should also be somewhat what realistic and fit within your budget. The key thing is to make saving fun and simple.

Do it Automatically

One of the best ways of saving and budgeting is to do it automatically. The idea is to “pay yourself first” which means that your savings comes before all other expenses and you live on the rest. The amount of savings you need will depend greatly on the savings or retirement goals you have. For instance you could start small, by saving as little as 10% or even 5% of your gross salary per month in an account you shouldn’t touch. The key is to have it automated on the same day or even moment you receive your salary. You could even go a step further and have your salary be broken down and sent automatically to different monetary accounts to simplify budgeting and more importantly saving.  For example, you could have accounts named, housing, fun, groceries, and transportation. This encourages you to keep an eye out for all the various expenses and keep tighter control of your money, also providing insight into your spending habits. Knowing how you spend your money will help you realize where you can cut and ultimately save more.

Link your saving with your spending

Another ideal way to save is to link your saving habits with your spending habits. For instance every time you make a purchase, contribute a small amount towards your savings goals. Advanced apps such as bunq can trickle small amounts into your savings account with every payment you make by rounding up to the nearest Euro. For instance if a payment you make is 17,25 EURO then 0,75 EURO will be put towards your savings goals.

Make your savings harder to spend

Another useful trick is making your savings harder to spend. By locking your savings away in an account which you can’t touch for a period of time helps curb impulse spending. Options include term deposit investments or simply having a savings account which when accessed will ask you if you really want to spend the money. Our friends at bunq have developed such a system by which the user is prompted if she/he would really like to withdraw the funds from a savings account.

Where to go from here?

Always remember that having more money at the end of the month buys you more freedom to do the things you love. Special thanks to bunq for providing us with theses tips. bunq is available in several languages EN, IT, ES, FR, DE and NL and provides support in English. Their app is easy to use intuitive and most of all allows you setup savings goals and up to 25 bank accounts. Available on android and iOS.