Are you unable to improve your savings capacity month after month? With a simple change of habits you can increase your savings significantly, reaching the goal of €1,500 per year , or even more.
There are certain tips that give you the option to save based on your lifestyle. They are perfect for having an extra for whatever may happen, in addition to increasing your well-being and having a happier future.
Personal loans can help you get extra money at a specific time, but they won’t be necessary if you manage to save on your own.
Without further ado, here are our tips:
Contenidos
The best tips to save €1,500 or more a year
1. Financial evaluation
The first thing you should do to make your savings grow is to control them.
- Keep track of your finances for a month. This includes both expenses and income you may have.
- Calculate the difference between your income and your monthly expenses to find out how much savings you can make.
- Divide expenses and variables: fixed expenses are difficult to adjust (such as mortgage or rent), while variable expenses are easier to regulate (such as grocery shopping, subscriptions, leisure, etc.).
- There are a number of apps that can help you really save money. These are management apps that have been designed to fit into your monthly budget.
2. 50/30/20 rule for debt repayment
You will only be able to save money if you start by paying off your debts . To do this, you can use the 50 30 20 rule . It is a very effective method that can help you get rid of your debts and thus improve your savings. It works like this:
- You should spend 50 % of your income on covering your needs (paying your mortgage and bills).
- 30 % will be allocated to variable expenses (whims).
- the remaining 20% will be used for your savings .
Let’s imagine that we earn around €2,500 net per month ; of this, you can set aside around €500 for savings. This allows you to pay off around €6,000 of debt in just one year.
3. Open a savings account
Savings accounts are very practical for separating the money you want to save from the money you have to spend. Opening a savings account is a good way to avoid the temptation of using savings to pay for daily expenses.
Depending on the bank you choose, they may offer very interesting conditions. For example, we could get a certain level of interest that would increase our savings capacity.
4. Automation
Most of the current banking platforms have automation tools that can be very interesting.
If your monthly income is fixed, you can automate the amount of savings . For example, you could create what some banks call piggy banks and fill them up each month with a certain amount.
What this achieves is to establish savings as if it were a fixed monthly expense. If we are aware that we are going to subtract the same amount each time, we will save without even realizing it.
To prevent anything from affecting your savings, it would also be a good idea to automate your invoices . Keep in mind that companies will charge you significant fees for not making payments on time. If you don’t want to have to deal with these expenses, it’s better to pay without delay.
5. Save on your monthly bills
This is easier said than done, but the truth is that you may be overpaying for certain services.
- Check if your electricity company is the cheapest. By looking for a cheaper rate you won’t have to use your savings to pay the bill.
- It’s a good time to change the lighting in your home with LED bulbs . They allow you to reduce lighting costs by around 75-85% .
- A smart thermostat helps you control your heating, which is one of the main things that can reduce your ability to save.
- Beware of air leaks . Any leaks in windows and doors will significantly increase your electricity consumption.
Keep these tips in mind and you will be able to improve your savings . You must be consistent and aware that every cent counts. Only then will you be able to reach €1,500 , and even overcome this barrier.
