When it comes to saving money at home, it’s easy to think “I want to improve my financial condition because I earn too little.” Unfortunately this is not always easy, while it is by far the most controlled money management.
So, directly from the experience I had with dozens of families during my banking career as a financial consultant, I want to illustrate a practical and simple method for your savings. You’ll see, the results will be immediate.
How to save at home, get through the month and put something aside
If you have an entry of 1,200 euros a month and you find yourself the first few days without a bill, then you have work to do on managing your finances.
At this point you will tell me that you cannot get the money at the end of the month.
In some periods this is true and is due to necessities, while for many others, I realize that saving money at home is almost a “chimera” as if money escaped from your hands, isn’t it?
For the occasion I will now show you a practical and simple method that I have experimented with dozens of families during my bank journey, and with all of them I noticed immediate improvements, in their savings, within a few months.
Here are the 3 rules to better manage your savings at home:
To save money at home start dividing your earnings
I advise you to divide your finances like this:
According to this simple rule all our income should be divided into three parts, considered for each individual person, or for an entire family nucleus.
– The largest part, 50%, will be used during the month for all the fixed expenses: the rent or the mortgage of the first home, the payment of any installments for the repayment of loans, the transport to go to work, the fees of schools, gyms or other. This block includes all the expenses that cannot be avoided, therefore also the various taxes, the bills and the food that is consumed every day.
– 20% of what is earned monthly should be set aside, possibly on an account separate from the main one. This money can be used for any eventuality: to buy a house, to maintain the machine, for unexpected medical expenses.
Saving 20% of what you earn each month quickly leads to a nice nest egg, which must be used conscientiously.
– The remaining 30% of revenue will be used instead for entertainment, from fashionable clothes to dinners with friends, or tickets for a show.
In fact, this rule should be seen in a more elastic way, when everyday life is not rigidly marked: it happens to go out to dinner 3 times in a week and to have to pay a fine, all things that heavily affect the budget.
What I recommend with my whole being and to always have the sheet at hand and always write down all your income and expenses.
Calculate your available budget for each expense
“Eh? What are you talking about Gianluca ?? “… yes, I know, it may seem complicated but now I’ll explain everything” simple “.
Let’s take a concrete example: if I asked you in this instant “How much do you have to spend from here to the end of the month taking into account your fixed expenses?” You, could you answer me?
And I don’t say an answer like “mah, more or less € 800” but something more precise like “€ 737”.
Knowing this figure and using it every day to make all your spending decisions will give you more control and therefore more peace of mind in making the right choices (avoiding debts).
If you really want to save money at home, plan your fixed outings
To say the least, the fixed costs really represent a heavy cost for Italian families : even the smallest, if added together, create a considerable weight that will be felt at the end of the year, when we will probably find ourselves with few savings, and we will start to ask ourselves the famous question “Where did the money go?”
I recommend this system because you probably won’t be aware of it and expect answers like: “I don’t feel like it”, or, “it serves no purpose” and “I earn little already I don’t have to check absolutely anything”.