5 effective and easy-to-apply techniques for saving
Have you realised that it is practically impossible to save? Are there months in which you have to use your credit card to reach the end of the month? When something unexpected happens, do you find it difficult to deal with it? If you have answered any of these questions affirmatively, you need to know how to save effectively, and to begin to see money building up in your current account, you must take the following steps:
1. Make a budget and follow it
Not being capable of saving is not only something that happens in low income families. Medium and high income households often spend more than they receive because they are absolutely ignorant of their monthly outlays. The key to grasping the problem is to make a budget, in other words a forecast of annual expenses including both fixed and variable. In a previous article, we explained the proper way to draw up a budget; if you follow it carefully, you will be halfway there.
2. Compare prices and don’t shop compulsively
Although the price factor is not the only one that determines where the weekly shopping is done, it is important to compare the amount of the different products because you may be paying more without knowing. A recent study by the Consumers Association shows that the difference between doing the shopping in the most expensive supermarket or in the cheapest in the city is around 900 euros on average in Spain, and this can be extended to other lasting goods, like cars, in which differences are seen of up to 24% depending on the dealers.
If you are familiarised with digital environments, the most effective thing is to use online price comparisons when contracting the telephone, gas, electricity, insurance and purchasing household electrical appliances. There are a multitude of webpages that automatically compare and allow the quality/price of the desired goods and services to be measured. The best are Rastreator, Kelisto, Twenga, Ciao, Idealo, Kelkoo, Trivago, Kayak, Acierto, SoySuper, Carritus and Tudespensa.
It is also useful to look for catalogues to locate the best offers, although it is very important not to purchase products you do not need simply because the price is good. An offer that might seem attractive today, may not be so tomorrow. It is also recommendable to seek opinions and analyses from users who have previously bought the product. A simple investigation over the Internet can help you shop intelligently.
Once you have selected the establishment where you are going to buy, you have to avoid spending more than planned. The best trick is to go to the supermarket after breakfast or lunch to avoid hunger causing compulsive purchases, although what never fails is following a list made according to the family budget and needs. If what you need is to renew your fridge, television or mobile phone, wait for the January sales, take advantage of Black Friday or go to the shopping centres on days when they take of the VAT.
3. Use the Internet to shop … but carefully
Using the Internet to buy goods and services is one of the best ways to save, but you have to take care because the ease of buying products with a single click can turn this advantageous option into the worst enemy of your current account. Platforms like Amazon, in which the user is recommended articles depending on their previous purchases, generate continuous temptations that have to be avoided. Overall, you have to use the same common sense as in the consumption of any other kind of technology: with moderation and without ignoring the final purpose.
There are also websites that offer discount coupons in which it is possible to save more than 50% on certain items, such as Ahorradoras.com, Outletinn, Groupalia, Offerum or Groupon, for instance. There are many more that can be discovered with a simple Google search. Even the large platforms like Amazon and Aliexpress have discount programmes which, in the case of Jeff Bezos’s company, include household and food; and if you have a large family and you join the FEFN you can get exclusive sales.
4. Set specific goals
Another of the tricks to build up a small financial cushion is to determine which products or services you want, find out their cost and set a specific goal to get them without using your credit card or any other kind of financing. Put a photograph of what you want to get in a visible place in your home, workplace or car so that when you feel tempted to buy a new suit or dress (or the latest mobile phone) you put the brake on and think that it is best not to give yourself a treat now in order not to miss the chance to achieve your desired good in the near future.
What percentage of your wage or pension should you save? Although there is no universal reply for all families, the minimum amount that should not be spent each month is 10% of the net income, in other words one out of every ten euros that are left after discounting all outlays. If you are not capable of achieving this, you might accept 5%, but do not give up the target of 10%. The important thing is to generate a saving habit.
5. Reduce household expenses
If you are incapable of saving despite following the four steps above, there is nothing left for you but to make a family audit of the expenses and reduce whatever you can to avoid them recurrently exceeding your income. Installing a thermostat to avoid consuming more power than necessary, renewing high consumption electrical appliances, reviewing the type of contract you have with your mobile phone and television provider, avoiding eating out and looking for activities in the open air to enjoy with your family that do not require great outlays are tools that will help you save without too much effort.