Do you want to take care of your future and the future of your loved ones? Or have you found yourself in a difficult situation that requires additional funds or even loans? We will tell you how to create savings and take care so that you don’t have to worry about overcoming your money difficulties in the future.
Every one of us has faced running out of money in our wallet at least once in our lives. Some overcome this more easily, while others may be empty for a few days. In order to avoid such situations at all, it is very useful to create savings, which thus will be a lifeline or a safety cushion in situations where there is not enough money for something. Savings can also help you avoid borrowing, because you will always have money of your own with which you can solve your difficulties. While it is clear to most people that you can protect yourself that way, it is rare that you can save and save, and only on the rare occasions when you run out of money do you not borrow money. Also, many people have a misconception about creating savings – they think it is very difficult and requires a lot of money. Let’s try to make life easier for you and tell you how you can do without loans by sticking to a small plan of action.
Where do I start if I want to build savings?
As in any business, there must also be some kind of plan of action, and you should know the goal – as the end result of the plan of action. So, you should start by defining a goal. Everyone can have different goals: one wants to accumulate 500 euros, the other – much more, the first will take a couple of months, the second – a whole year, everyone will do it in accordance with their abilities. It often happens that a person does not get a big enough salary and deceives himself that he has nothing to save. In reality, you can save from any available amount: even if it is one euro a week, in a year the amount will be more than 50 euros. Time flies and a year goes by very fast, so if you put aside some 10 euros every month, in a year you will be happy to know that you have a good safety cushion to get rid of quick loans and fees.
Where do you start if you want to build savings? When you set your goals, you will also have to start thinking about where you can save so that your goal can be achieved without having to take money away from what you really need. Saving is at the heart of any family budget planning – you can’t plan for anything if money is spent thoughtlessly. Each person has to pay some systematic payments during the month, expenses that are very similar or exactly the same from month to month are formed. Here you can always find something to optimize by reducing bills and expenses – you just have to go deeper and recalculate all expenses, find some cheaper alternative, or discard anything unnecessary or impractical. Loan payments can also be an unnecessary burden, so you need to be careful with them and try to stick to the idea that you will need to manage on your own, rather than relying on someone to lend you money. Your own strength will be careful budgeting, saving, and creating savings.
When you arrive at all of the above, you will have a ready-made plan of action with a clear goal of saving money. It may seem like everything is about to change for the better, but that is not always the case. Often it happens that a person does not fully give himself to this task, and somewhere gives weakness, spending money where he can’t afford it based on the size of his family budget. At first occasionally, and then more and more often, the person begins to spend the money already set aside, directing it to ill-conceived purchases, justifying himself by the fact that he will be able to save again. The determining point here is discipline, or rather the awareness of the need for self-discipline. A man must have character, otherwise he will not be able to save anything, and in the end, when he loses control of his finances, they will diminish, and he will have to think about some quick loan. This is where a frequent reason for applying for credit comes in: the inability to save, to control one’s finances and, very often, the habit of living beyond one’s means.
How can you do without credit without saving?
Practically it is possible. A person can indeed do without credit even if they do not save anything. There are several options here: ignoring credit altogether – by feeling uncomfortable or poor; by earning an adequate salary; by planning your finances so that you have enough for everything. How do you ignore credit? Explain to yourself that these services are unprofitable and that they have ruined many lives – motivate yourself not to become one of those unfortunate people who have been trapped by creditors. How do you endure inconvenience and poverty? If we are talking about some luxury services, without which you can do just fine, then there is not much unhappiness from a slightly less colorful life. A person gets used to everything very quickly. If before you slept in an expensive bed and watched the beautiful landscape from the window, nothing happens to you if you sleep on the floor in a small rented apartment, behind the window which is nothing pleasant to see. There are many examples, and in cramped circumstances there is always something to strive for. Hunger, however, will be harder, and to do so is not necessary, but your eating habits may well change, moving to a more economical menu, which will be excluded meaningless delicacies and delicacies.
Finally, we come to the point where you can do without credit when planning your finances. It really is the only and correct way to manage your money, do without loans, and often come to the point of being able to save something as well. If you plan carefully where and how much to spend, it will prevent you from throwing money away and make you appreciate the money you earn with your own hands a lot more. Over time, it will become your way of life, and nothing else will be able to make you deviate from this path. Plan, save, try to earn at least a little more so that you have enough for savings, and you’ll never have to go to a lender who gives out loans in a situation where you can’t afford them. Yes, if a person has no money at the moment, they can’t afford anything, and they can’t even afford to borrow, because the money that they will have to pay back, they don’t have either. You have to live in a tomorrow that has not yet come, a tomorrow that you know nothing about and cannot even imagine what will happen and how it will be. Today it looks like everything will be fine, but tomorrow everything can change, the situation will turn 180 degrees. So try not to rely on luck and the services of creditors – rely only on your own strength and abilities.
Why Must I Save Money Long-Term?
Why is it necessary to make long-term savings? Savings, stash, reserve – everyone calls the process of saving money differently. The meanings of these words are slightly different, but the principle is the same – not to spend all of your money, and put some of it aside, not planning to spend it under any circumstances. People have different habits. For some, creating savings leaves a headache, because although they set aside a known amount of money, which they promise themselves not to spend, they will spend it anyway – because they know that buying a new pair of pants will not affect their monthly spending. It happens that by the end of the month there is not enough money in the wallet to buy bread, which makes it impossible to save anything else. But there are still people for whom saving money is a systematic process, and money, despite daily spending, is saved regularly. Creating savings is undoubtedly only beneficial, so at least a very small amount, but systematically and regularly, should be put aside, in a stash, not spent.
It is definitely necessary for the well-being and security of every family or individual to make savings. They can come in handy when, for example, a job is lost or there is a short-term disability, whether due to illness or family circumstances, that causes the family’s income to drop dramatically or go to zero. So that the family does not suffer from hunger and does not have to live on the street, it is savings that will help to survive. And in this case you will be glad that you were so farsighted and responsible that you thought about the future in time – about the fact that there can be a rainy day. You will also breathe a sigh of relief, because you won’t have to take a loan or borrow money from relatives. You have to be responsible all the time, even during the times when everything is going well, because in life you can’t know anything ahead of time. Creating a “safety cushion” should be an obligatory measure applied in every family. Even if your salary is small, but even 20 euros a month is enough to take care of your future.
What are the purposes for which the money saved can be used?
Savings are needed not only when income stops for a while, but also for other unforeseen circumstances, for example, when you suddenly encounter an illness that requires significant funds for treatment. Likewise, a refrigerator or computer can break down unexpectedly, and you urgently need to buy a new one. Of course, there are many myths about saving, but what really matters is something else. Saving money can be for something specific – for a trip, for some expensive thing like a TV, a bike or a car. However, the accumulated money should not be spent to the end, all the way to zero, a certain amount should always be left for contingencies. Over the course of many years savings have also been made by parents who are thinking about their children’s future – many responsible parents have already set up a savings account for their children from the moment they are born, and they deposit a specific amount of money each month in that account.
The purpose of saving for your child’s future may be to pay for his or her education or to help him or her start living independently, for example, to buy his or her own apartment when the child grows up and is able to support himself or herself. As many reasons as there are for saving, there are as many ways to do it best. It is possible to save money in a “stocking” or keeping savings at home, or to open a savings or checking account at a bank, and the savings will be transferred to the bank. However, you should not keep the savings in one place with money intended for daily expenses, because then the calculations might get mixed up and the money intended for the stash might be spent unintentionally. You should also remember that it can be very insecure to keep savings at home. First, because any of us can be visited by thieves or crooks, and second, to keep large amounts of cash can be difficult, for example, in cases when the state currency changes or its denomination.
In our opinion the safest way to keep your savings and keep them in a bank is to have them in a savings account or in an ordinary checking account. A savings account is an account in which you invest a specific amount of money, usually a few hundred or a thousand euros. This amount grows over time, as the bank increases it by a specific interest rate. This amount is deposited for a specific period of time, during which the money can’t be withdrawn and is at the bank’s disposal. Also, the amount of term savings, the deposit, cannot be increased. This option will be the most appropriate if, for example, you receive an inheritance or sell your apartment, and you don’t want to spend the money but want to save it for later. A savings account is usually designed for those who want to take care not only of their child’s future, but also of their own. The purpose of a savings account is to create a financial reserve for unexpected events.
The interest on the savings is a welcome benefit.
A savings account also earns a profit interest every quarter in addition to the accumulated amount. In contrast to a deposit account, you can get rid of the money in your savings account within about a week of telling your bank that you have saved it. You can also keep the money you have saved in a checking account, but not necessarily in the same account that you use to receive your salary and make payments. In this case, you can access your money at any time, but you will not receive any interest on it. After reading this article, you can now see and understand how important it is to make savings, and as September 1 approaches, you can probably no longer say how much money you have saved will be useful in sending your children to school. And spending them for that purpose would be much better than taking out quick loans before school starts, which could cause even more money difficulties in the future.
Building savings or taking out a long-term loan?
Building savings or taking out a long-term loan after all? There are situations where building savings is a better option to thoughtfully make some savings without loans. There are situations, when it is a good idea to create some savings for a long time, maybe for years, to systematically and carefully put them away. Savings accumulated over several years will be your stable guarantee against any unexpected turns in life, no matter whether they are in the form of urgent car repairs or starting a new business, the money reserves will help to implement the plans. Of course, in words everything is beautiful and easy, but in real life it is necessary to make a lot of effort to change your habits and create these savings, because people are used to live very fast and spend very quickly, they are used to getting everything at once. Therefore, you should not exclude from your plans to get a long-term loan, which can help to realize your plans for some acquisitions earlier, without waiting for many years until the necessary amount is accumulated. Long-term loans have their advantages, they are not as ravenous as -fast loans – you can sometimes rely on these services. Of course, saving and creating savings for the long term is necessary, but you should also think about how much you need the desired thing and whether it will be cheaper to overpay the interest on the loan, but to buy it immediately, when it really was in need.
Today it may not be so important for you what you are saving and saving up money for, but maybe next month or year you will thank yourself for your foresight, because you have created an opportunity for yourself to solve an unforeseen situation, which could only be solved with money. Think not only about your future, but also about the future of your children, for it will directly affect your life as well. A very simple example: if you save up money to pay for your children’s college education from the moment they are born, you will not have to think about where to get such a large sum to pay for their studies, and the children themselves will not have to take out a student loan. Everyone chooses the type and amount of savings according to their abilities and – most convenient and appropriate to the situation. Remember: regardless of your income level, save at least a small amount for your future.