Studies say that in Spain does not have an adequate savings culture. Although the trend is on the rise and many people are adopting this practice, there are still those who need certain methods to be able to preserve an economy in their homes and in their pockets.
Without going any further, the Spaniards are spending more even knowing that we are in a catastrophic situation with rising prices and inflation.
It is true, in our country there is a confused economic feeling between the rising prices, inflation, possible recession and consumer habits. In other words, we spend more, in the midst of an economic scenario that citizens consider “bad” or “very bad”, as evidenced by the latest CIS barometer of this month of July.
These behaviors have background associated with psychological and a lack of knowledge about how to invest and save. On the latter, we provide a list of methods that can help us lead a better economic life.
Savings habits can be formed and improved, but to do so, there is an irreplaceable first step: education. The lack of financial education it increases the risk of inequality, since individuals do not know the tools necessary to have good financial health and make better decisions.
Kakebo is the Japanese word for household account book and that is precisely what this method is based on, tallying. At the beginning of each month, fixed income and expenses should be recorded. (payroll, electricity, food…). With this it is possible to know how much money will be available. After this step, the method consists of noting each expense, however small, and classifying it accordingly: leisure, clothing, travel, etc.
The goal? Learn to improve your finances. The philosophy of the Kakebo method is to know how to identify which are the essential expenses and which can be eliminated to achieve the savings objectives. Fumiko Chiba, author of Kakebo: The Japanese Art of Saving Money, indicates that the savings margin can reach up to 35% of income.
ALP stands for “Put the First Aside”. Consists of allocate part of the money to savings just collect the main income (payroll, pension…) and live the rest of the month with what remains. For this to work, you need to set realistic goals. For example, if a person enters 1,000 euros, he cannot allocate 800 euros to savings, but 100 euros can.
To know how much to save, experts recommend making a analysis of income and fixed expenses that take place during the month. In short, make a budget. With this, a coherent decision can be made based on the current reality.
Harv Eker Savings Method
This method seeks, through revenue sharing, to avoid financial mismanagement. Canadian businessman Harv Eker, after a major economic setback due to inadequate management, began to analyze the relationship that people with great fortunes have had with their money and that’s how he developed this system.
The Distribution that Eker proposes as an income is 55% for fixed expenses and basic daily needs: housing, bills and food. With the remaining 45%, five other shares will be made: 10% to invest; 10% to continue training; 10% for leisure and unnecessary purchases; 10% to save it without investing it; and 5% for charitable donations and causes.
It is one of budgetary approaches better known. It is based on structuring income according to the 50-30-20 rule: 50% of income for housing, food and other basic needs; 30% can be spent as you wish; and 20% for savings.
Another alternative to get a the mattress is an investment, especially in an environment like today’s where inflation reduces purchasing power, i.e. with the same currency you can buy fewer goods and services than there are a year. For this reason, it is important to know what investment alternatives exist and which is the vehicle that best suits each person’s profile according to their objectives and needs.
For this, diversification, the classic idea of not putting all your eggs in one basket, and planning are essential. It is essential to think about how much can be invested how long and above all what risk are you ready to take? There is a wide range of products depending on the profile of the investor: investment funds, ETFs (exchange traded funds), pension plans, etc.
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