Money: Good Money Management

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The basics of savings: Set aside small amounts of money every month from a young age. Invest that money in a balanced way according to your investor profile, and it should yield an important sum of money in your later years, or even good money after a decade or two, allowing you to make that down payment for buying your house. €20 per month over 40 years yields €9,600 before any interest. €100 per month over 10 years results in €12,000 before interest.

The basics of spending efficiently: Your daily shopping behaviour can make a big difference to the balance of your bank account. If you need €250 in groceries per month and you buy those at a discounter instead of at an upscale supermarket you may get the same, or similar, for €200, but without the ‘posh’ experience. That is €50 already per month in savings.

If you prepare one nice dinner at home every weekend instead of eating out twice, you can save €25 per week easily. That is another €100 per month in savings. Big ticket items can also make important differences. Should you really spend €2,000 on that holiday, or can you get something closer to home, or in a less well-known place, for half the price that is just as good?

Even more costly items are cars and houses. Particularly because their cost is not only in the purchase price, but also in the running costs. A car needs gasoline, maintenance, insurance and replacement after some years. A house needs water, gas, electricity, insurance, cleaning and maintenance. Both are also taxed on a yearly basis. do not own them you have other costs, like public transport or the monthly rent and charges, to pay for. But, small gains, even one percent, make a big difference on expensive items of €10,000 or €100,000.

The real name of the game in saving is not only to reduce your spending by buying efficiently, but also to effectively put the financial gain aside on a savings or an invest account, and not touch that money for optimal good money management.

Of course, money is not made for savings alone. You are only as rich as what you can spend. Still, a bit of reflection, analysis and comparison before spending your money, and putting the gains of efficiently spending on a savings or invest account, will help you a lot in bringing together that amount of money needed for the down payment on your house 10 years from now, or for any other project you may have.

Starting to save is not easy, because there is so little in the account at the start. Like with many good things in life it takes perseverance to advance and to achieve your goal. Once you get to a 4-digit amount on your bank account, it becomes a lot easier. And after that, if you invest in a diversified way according to your investor profile, compound interest or other income will start to provide support. It is never too late to start saving. Give yourself an objective that you can reach and monitor your progress at the end of each month. Do not give up. There are apps around that will help you with managing your budget and reaching your savings target.