Financial education: Tips to Learn to Save

 

Saving refers to the action of setting aside some part of ordinary spending, in order to obtain something. Everyone at some point has saved in some way, from the piglet and the famous batches, to making use of some of the financial instruments offered by banking institutions.

To save, it is necessary to organize our resources and develop a savings plan that contains 3 fundamental steps:

1. SET A GOAL

The first thing is to know what do you want to obtain? What is the best option? who much does it cost? In this sense, we recommend that once you know what you want, check various options and compare prices, quality, and benefits, until you find the one that best suits your needs.

For example: If your goal is to buy a car, you should think about what brand you would like, if you want it standard or automatic, what color, used or new, etc., and then give yourself the task of going to car dealerships to compare prices.

Once this is clear, you must decide when do you want it? Determining a time range is very important since from there you will be able to define the necessary resources in that period.

2. IDENTIFY YOUR PERSONAL SITUATION

You will have to answer two basic questions: what is my income? and how much do I spend? For this, we recommend adding your total income and comparing it with expenses, making a list of fixed expenses, which refer to those that we can foresee.

These do not necessarily have to be always the same amount (since we do not know-how much the electricity or gas bill will come from), however, we know that month after a month we will have to pay it. For example rent, internet, cable, telephone, grocery shopping, etc.

On the other hand, make a list of variable expenses, those that are not essential and that change constantly. Such as meals away from home, going to the movies with friends, medical consultations, buying shoes or clothes, etc.

3. LEARN HOW TO CUT YOUR EXPENSES

Once you have both lists and having compared them with your total income, analyze the expenses that you can do without or those that you could reduce.

There are unforeseen expenses that it is impossible not to cover such as medical consultations and medicines; But for example, if you realized that you spend a lot of money eating every day at the restaurant near your work, you could try to bring food from home.

This setting will allow you to increase the amount available to save.  Also, consider the possibility of downloading a personal finance app, this can help you keep track of all the income you have every month and make you aware of what you are spending your money on. Once you have completed these steps, you can decide where you will save the amount of money you have allocated to achieve your goal.

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