Five tips on how to save
If you’re looking for ways to save, check out the five tips below. Simply choose the ones you’d like to follow and make ‘saving money just as easy as spending it’. Check out our savings tips now!
Savings tip #1: save money first, then spend it
Knowing ‘how’ to save essentially boils down to knowing ‘when’ to save and that’s often where a first challenge presents itself. Many people like to save something at the end of the month. But by then, there’s usually nothing left in the current account to transfer to the savings account.
To avoid this scenario, it’s better to save at the start of the month as that’s often the time you get paid. You can then be certain of saving what you had wanted to save. If you think you’ll go overdrawn on your account at the end of the month as a result, you won’t if you keep a close eye on things. When there’s less money on your account, you tend to be more careful about what you spend it on.
Be sure to try it out for yourself. You can even arrange for the money to be transferred automatically. If you always get paid on the first day of the month, you can transfer a fixed amount to your savings account by standing order each month, say, on the fifth.
Savings tip #2: chart what you spend
Saving money starts with ‘spending less’, so identify what eats most into your budget. For example, think about how much goes towards your loan or rent, food, clothes, energy and holidays. Once you know how much you spend on each category, you can make plans to reduce some expenditure. Doing that certainly doesn't mean having to radically change your lifestyle. Sometimes just changing energy supplier or supermarket is enough.
Savings tip #3: make your little savings add up over time
As they say, every little helps and that’s also true for what you spend. For example, if you order a coffee every day on your way to work and, for the sake of argument, you pay 2 euros for it, it’s hardly worth thinking about. But when you add up what you spend on your morning cup over a year, it would be in the region of 500 euros.
If you discover such ‘creeping consumption’ in your spending habits and scale it back, you’ll quickly end up with a tidy extra sum to put into your savings account.
Savings tip #4: delay purchases for at least 24 hours
Almost everyone impulse buys only to see the item they’ve purchased collect dust. However, it’s really easy to avoid some of these buys by putting them off by a day (or more). You might well change your mind a day later. Ask yourself, ‘Do I actually need this item?’ and then, ‘Wouldn't it be a better idea not to buy it and to save the money instead?’
Savings tip #5: try to stay ahead of inflation
This last tip is slightly ‘different’ in that it’s sometimes more interesting to save in another way. To do that, you need to keep an eye on inflation. If it shoots up, your savings will actually lose value.
It’s still a good idea to have money on your savings account as a financial buffer, as it’s protected and can be accessed at any time. However, if you have money you can do without for a few years, you can also consider products that offer potentially higher returns, such as time deposit accounts. They enable you to lock away money for a pre-determined period and at a fixed rate of interest that is often higher than what you would earn on your savings account.
Another alternative is the KBC Brussels Investment Plan. Although investing obviously entails a certain risk and costs, it also gives you the opportunity to earn a higher return. If the return on your investment exceeds inflation, you stay ahead of inflation and your purchasing power grows. In such a scenario, combining saving and investing can be a good way to protect yourself financially over both the short and longer term.
