How to start saving money wisely.

The ability to save money is quite right, especially in the current situation in Ukraine. However, the question of how to save money every day or regularly remains relevant. After all, options for saving money on a card or how to save money with a small salary can help during the most difficult times. 

And if the concept of large investments is clear, then understanding how to save money from a salary, especially if it is small, requires more effort. Particularly against the backdrop of constantly rising prices for food and utility payments. In general, it is possible to choose a method to save money from a salary correctly at any level of income. 

How to save money with a small salary? 

It is important to understand that it is always better to save money wisely (in cash or on a card). The instability of the world has shown how vulnerable every person can be. Certainly, the lower the salary, the more difficult it generally is to save funds. 

Overall, saving and accumulating money is an important step towards financial independence, especially in conditions of economic instability. In Ukraine in 2024, where inflation and currency fluctuations can affect purchasing power, the ability to save money becomes a necessary skill. The first and main step towards accumulating money is a clear understanding of the goal. Of course, it is necessary to accumulate funds, but first, it is better to understand how necessary and realistic this goal is. Defining the goal also helps to assess how much money needs to be saved and by when.

In general, finding a goal is not always easy. Here is how to do it more easily:

1. Short-term prospects. Saving for a vacation, renovation, or a major purchase.

2. Medium-term ideas. Buying a car, first payment for housing.

3. Long-term prospects. Investments in the future of children, purchasing real estate, pension savings.

That is, the first option is planned for a couple of months or a year, the second for a couple of years, and the last, for example, for 5 years. Choosing a specific goal will make the accumulation process more conscious and help avoid impulsive spending.

Next, create a budget 

If there is a goal, the next step is to make a plan on how to track all of this. To save money wisely, it is important to control expenses and income. Creating a budget is the foundation of financial discipline. A budget will help you see where your money is going and which expense categories can be reduced.

The budget will be the key to everything. Here’s how to calculate it: 

1. First, understand your income. This includes salary, side jobs, and passive income.

2. Next, conduct a thorough analysis of expenses. Start with major categories such as food, housing, transportation, entertainment, and unforeseen expenses.

3. Then, you can identify a certain sum that can be saved safely. Determine what percentage of your income you are willing to save. Start with 5-10% and gradually increase to 20%.

Maintaining a budget will help you save money regularly and keep your finances under control.

How to simplify the whole process? 

There are a couple of simple tips on how to save money faster. For example, the principle that will help instill the discipline to save money regularly. The essence of this method is simple: as soon as you receive an income, set aside a predetermined percentage (for example, 10%) into a savings account. The remaining amount can be distributed among other expenses.

How this method can help: 

1. First, it provides the organization that everyone seeks for savings. This method allows for stable savings.

2. This method also protects against unnecessary spending. That is, you can immediately set aside a part of the income, avoiding the temptation to spend all the money.

3. Overall, the method is simple and accessible. You can automate the transfer to a savings account if you have the option to set up an automatic payment.

This rule is especially useful for those who often find themselves in situations where money runs out before the end of the month.

How to optimize expenses? 

Optimizing expenses can also help. One of the most effective ways to save money is to cut unnecessary expenses. The habit of optimizing your expenses will allow you to direct funds more efficiently towards savings.

Here’s how you can do this: 

1. First of all, you need to review your subscriptions. Check subscriptions to online services and keep only those that are truly necessary.

2. It’s better to always make a list of all purchases. Before going to the store, make a list and try not to buy unnecessary items.

3. You can also compare prices. The first price is not always the most favorable, especially when it comes to large purchases.

4. It’s better not to take loans and installments. Loan interest reduces your overall income, thereby decreasing your ability to save.

Optimizing expenses is a smart approach that helps not only to save money but also to manage funds more wisely.

Additional tools 

Additionally, you can use various tools. To ensure that money does not just sit "under the pillow," it is important to use various financial instruments. These will help preserve your savings and even slightly increase your funds. Which instruments are we talking about:

1. You can consider deposits and similar investments. A safe way to save, especially if you choose a deposit in a reliable bank.

2. Accrual of interest on the account. For example, savings accounts that allow you to save while simultaneously earning a small income.

3. You can even consider bonds. A reliable investment method that brings returns higher than deposits and is protected by the state.

4. You should also consider pension funds. If long-term savings are planned, it is worth considering pension insurance or savings in a private pension fund.

These tools will help you protect your money from inflation and increase your savings.

Together with such tools, it is necessary to implement the so-called saving habits. Financial habits are an important element of savings. If you learn to treat money properly, it will be much easier to save it.