Tricks To Save Money In Just 40 Days
What are your tricks to save money? We Spaniards save, on average, around 5% of our salary, according to data from the National Institute of Statistics (INE). In other words, we spend 95 euros for every 100 we earn. This savings rate is well below the average for our neighboring countries and could cause us serious headaches in the future. Now that the economic situation is not the best, we must change the consumerist chip in our brains and increase the percentage of our salary that we reserve for tomorrow. Not doing so and trusting in the stability of our current job or that one day we will receive a public pension would be enormously irresponsible. Next, we will give you some simple tips that will allow you to improve your savings habits in just 30 days. And no, this is not a clickbait headline. After reading this article, we assure you that you will know exactly what to do to increase your savings rate. Also read: How to save water at home.
Improve Your Savings Habits In 4 steps And 40 Days
Step 1. Calculate how much money you have earned throughout your life (Duration: 7 days)
Before starting to save, you must gain perspective and be aware of your current situation and how you got there; only then can you change it. That is why you must calculate how much money you have earned. Although it seems like a complicated calculation, it can be quite fun. Of course, you will need several afternoons alone and very concentrated until you calculate the final figure. You can start by getting all the income tax returns you have presented. You can do this from the website of the Tax Agency. But don’t forget to add up your income from when you were young. It will be very difficult for you to remember the exact figure, but at least you can make an approximation. Imagination to power. When you estimate your lifetime earnings, you’re in for a big (and unpleasant) surprise. You will inevitably think: how could I have spent so much money?
Step 2. Calculate Your Net Worth. (Duration: 2 Days)
Net worth is the difference between your assets and your liabilities. Or what is the same, the difference between what you have and what you owe? A house, the money you have saved in the bank, or some company shares listed on the stock market are assets. On the contrary, the mortgage, personal loans, and the outstanding balance of credit cards are liabilities. If you have been responsible with your finances throughout your life, you should have many assets and few liabilities. If you subtract both figures, the difference will be the value of your net worth. We invite you to compare what you have earned during your entire life (step 1) with your current net worth (step 2). Do both figures add up to you, or, on the contrary, are they different?
Step 3. Calculate How Many Hours A Day You Dedicate To Your Work. (Duration: 1 Day)
By the time you execute steps 1 and 2, your mindset about money will have changed radically, but not enough. In the third step, you must calculate the number of hours that you dedicate to your work each day. Easy? Yes, but not as much as it might seem. Perhaps you start work at 9 in the morning and finish at 6 in the evening, stopping for an hour for lunch. Does this mean you work 8 hours a day? No, far from it. For the calculation to be real, you must consider all the hours you directly or indirectly dedicated to your work since if you did not have to go to work; those hours would be dedicated to other things. If the alarm clock rings at 7 in the morning every day to be in the office at 9, and you don’t come home until 7 in the evening, you work 12 hours a day. And this brings us to the million-dollar question: considering that you dedicate half of your life to a job, does your net worth seem fair and reasonable?
Step 4. Know Where You Spend Your Money. (Duration: 30 Days)
The fourth and final step will inform you what you spend your money on monthly. Although it is the longest step (you need 30 days), it is also the easiest. All you have to do is write down every one of your daily expenses, regardless of their amount. You can do it in a notepad, Excel, or mobile finance app… Any option is equally valid. You just have to find the formula that is easiest for you. Remember that you cannot forget to write down a single expense, however small and insignificant it may seem. As the month passes, classify expenses that make sense to you. For example, household expenses, vehicles, children, food, leisure… This will give you a global vision of what you spend your money on. You can use categories and subcategories if that is more comfortable for you. For example, the category “Leisure” can be divided into two subcategories: “Meals in restaurants” and “Other leisure expenses.” Perhaps this will help you become aware of how much money you spend each month on dinners and meals out.
Conclusions To Follow The Tricks To Save Money
Four steps and 40 days later, if you have been honest with yourself, you should have come to the following conclusions:
- Although your salary has always seemed low to you throughout your life, you have earned a lot of money.
- Almost all that money that you have earned has been spent on things that have not made you happy.
- The hours of work and your savings are unbalanced: you get fed up with working, and you have nothing or almost nothing.
- You are spending money beyond your means, and you know what.
Don’t you think the time has come to start generating wealth for yourself?