With the inflation rate reaching historic highs, and without wage increases accompanying this same rise, reinforcing savings may seem like an impossible mission. However, there are suitable strategies to these more difficult times, through which you can see your nest egg grow.
make a budget
The first step is make a budget🇧🇷 As a rule, the budget is made on a monthly basis. Use an Excel sheet, make a table with two columns, on one side you must put the value of your income or the income of your household, such as wages, rents, interest, among others. On the other side of the table must consider all expenses that you have over the period you are considering, whether they are recurring, such as the electricity bill or the installment of your mortgage loan, whether they are sporadic, such as the purchase of a household appliance, for example. more burden on your family budget. You can even mark (with different colors) those that are essential to differentiate from those that are accessory🇧🇷 This exercise will help you to understand which expenses you should start reducing or even eliminating. Also read: Family Budget: 10 Mistakes You Shouldn’t Make
Pay yourself first
Challenge yourself to make a “mandatory” monthly savings. In other words, pay yourself first. According to your financial situation set a percentage of your incomewith which you feel comfortable, to save every month🇧🇷 It doesn’t matter if you manage to save 5 or 20%, the important thing is that you start to have savings habits. In this way, the value to be considered in the income column in your family budget should already be deducted from the amount you withdrew to pay yourself.
Minimize your expenses
By marking in your family budget which expenses are essential and which are accessory, as we have already indicated, it will help you to understand where to cut. The ideal is to start reduce or even eliminate non-essential expenses🇧🇷 For example, if you have expenses in restaurants, you can choose to have meals at home, or take food to work and leave going to restaurants only for special occasions, as that way you will be able to reduce this cost. Spend some money on clothing and accessories of fashion? You can try to reduce this expense by buying these types of products only on sales or promotions. Try to buy second-hand, you can get quality products at good prices. essential expenses and accessories doesn’t mean you shouldn’t touch the essentials. can perfectly make an assessment of these expenses and try to reduce them as much as possible🇧🇷 Let’s see examples: The expense of electricity is essential, however, it can try to reduce the amount of your monthly billfor example by replacing the light bulbs in your house with energy-saving ones, or adopting simple gestures such as not leaving the light on when no one is in the room. supermarket are essential, however, opt for white label productsas it has a good price-quality ratio, make the most of the promotions and advantages that loyalty cards allow. fuel it is also essential, however you can also reduce this cost by taking short walks instead of using the car, opting for more defensive driving or starting to use public transport, are some of the examples that allow you to save on this item.
Increase your income
If you can no longer cut expenses, then you have to focus on the other side of the table, that is, the income part. If your total income does not allow you to achieve savings that you so much desire, the solution will have to go through increase your income🇧🇷 As? You can, for example, get a part-time job, or focus on something you like and try to earn extra money from it. Likes to cook? You can perfectly start doing take-out food, take advantage of the potential of social networks to publicize your “business”. Love animals? You can start pet sitting. Share your services with your family and friends. Do you have something at home that you no longer use? Sale. Create an ad on digital platforms, such as OLX or Custo Justo and earn extra money with those objects that are no longer useful to you. Read more: How to earn extra income through your hobbies?
Invest the money you’ve saved in profitable products
Once savings are obtained, the next step is monetize your savings🇧🇷 But where to invest? Term deposits are an investment product that is highly appreciated by the Portuguese, as it has guaranteed capital. However, there are other solutions, which you should try to find out about in order to make the best decision for you.
investment funds
If you are open to investing with risk, analyze the investment fundsas these products can reach interesting returns🇧🇷 In this situation, be prepared to make a long-term investment in order to cushion any devaluation of the fund.
Retirement Savings Plan
You can also choose to set up a Retirement Savings Plan (PPR)🇧🇷 There are products on the market with guaranteed capital and others without. The latter, on the other hand, have higher returns. By choosing to invest in a PPR you will also get tax benefits🇧🇷 The amount to be deducted from the IRS depends on your age, i.e.: If you are under 35 years old, you can deduct a maximum of 400 euros, provided you apply 2 000 euros in one year; If you are between 35 and 50 years old, you can deduct up to 350 euros, as long as you apply 1,750 euros in one year; If you are over 50 years old, you can deduct up to 300 euros, as long as you invest 1,500 euros in one year.
Saving Certificates
In terms of products with guaranteed capital, there is also the option of Saving Certificates. Their profitability is indexed to the 3-month Euriborup to a limit of 3.5%, in addition to receiving a permanence bonus from the second year: 0.5% from the beginning of the second year to the end of the fourth year: 1% from the beginning of the sixth year to the end of the tenth year. term of certificates is 10 years, Interest is paid quarterly and capitalized.
A professional writer by day, a tech-nerd by night, with a love for all things money.