Saving

Savings 101

Contrary to the wide-spread belief that only those with a fat paycheck can save money, it only takes so much – ten or twenty euros per month – to start saving and build a considerable backup in a year, for example. When it comes to saving, persistence is key; make it a regular habit to put money aside. Ideally, you should save 5 to 10% of your monthly income.

A savings buffer is first and foremost necessary for better managing your finances in an unexpected situation. For example, a sudden illness, vehicle repair or losing your job can drain your bank account rather quickly. This is why a savings buffer is also known as the peace of mind fund. Here are a few simple tips on how to start saving.

• Set goals

  Saving for a specific goal is easier than just putting money aside for rainy days. Once you have written down your goals, you will know how much money you can save each month and how long it will take to reach your dream. The goals should be clear, measurable, mean something to you personally and have a timeframe. We have provided a few example goals in the Financial Planner to help you figure out the most important things to save for. You can also set multiple goals, one for each dream.

• Set goals

  This is the start of it all. Every day write down your expenses and the groups they fall into; think about how to cut these expenses. You can use an Excel table, a notebook, the Financial Planner or an app, e.g. GoodBudget or Wallet. More on compiling a budget.

• Set goals

  You can start saving by smaller amounts and follow the principle of spending what is left from saving not saving what is left from spending. People often collect a savings buffer but then want to spend it on emotional purchases when the first opportunity arises. To avoid this, ask yourself every time you buy something if you need it or whether you can actually do without it.

• Set goals

  Open a new current account that you can use for a specific goal (e.g. travelling, rainy days, wedding, home, etc.). Swedbank allows you to instantly transfer money between accounts for free. When you get your salary, pay yourself first, i.e. set aside an amount for saving either on an account or a savings deposit.