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Bills and coins

Money saving systems

By Enrique Yecier | Economy Tips | 5 Feb 2023

To achieve financial freedom, proper money management is essential. One of the main problems we have is that we want to save at the end of the month with what we have left after spending; and so it is impossible. Ideally, you should separate a fixed amount of money from your income and pay yourself, that is, save them. And with what you have left then plan your expenses for the month.

For those who do not have a saving habit or self-control, here are some methods that can help you save. Use one, use them all, or have a mix of them. Whatever suits you best, but save.

usd dollar bills and coins

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Method 1 - Your age minus 20

It consists of subtracting 20 from your age and the result is what you have to save.

For example, you are 25 years old.

25 – 20 = 5% savings

Why this system?

Well, when we see the application of the system we see that savings are lower at a younger age, because we are supposed to earn less, or we are studying and we are at an age to enjoy, so we must allocate more money to live experiences and have fun. But as our age increases, we have better income and that is when we must allocate a little more to save for future expenses, children, retirement. This system is capped at 60-65 years, which is when you have already retired and then you have to enjoy what you have saved. Something is always retained for contingencies, but it is already the least.

Someone who follows this system from the age of 20 and with a fixed salary of 600 dollars would reach 30 with an accumulated salary of just 3,960 dollars, but if they maintained it if they were a woman up to 60 years of age, their retirement age, they would accumulate 59,040 dollars. pesos and up to 65 years, in case you are a man, you would accumulate 74,520 dollars. These amounts deposited in an annual fixed bank account at 3% interest would give them profits of about 1,771.2 and 2,235.6 dollars, respectively, per year; or about 147.6 and 186.3 dollars per month, which, added to a pension of 300 dollars, would allow them to maintain a level of income close to what they obtained when they were working.

The good thing about this system is that saving is gradual, so you get into the habit of saving.

Method 2 - The 52 weeks

This is a medium-term system, for 1 year. It is very simple; It consists of saving weekly money corresponding to the number of the week in which you find yourself.

For example, in week 1 you save 1 dollar, in week 34 you save 34 dollars and so on. But this is once a week not once a day.

If we follow this method, when we finish in week 32 we will have 1,378 dollars saved, which you can use to travel on vacation to another province, the end of the year holidays, buy something you need or deposit it in a fixed account in the bank or invest in stock market to generate interest.

Depending on your income you can start with 1 dollar or 5 or 10, whatever you decide. You can start it at any time of the year, whenever you want, you don't have to wait for January.

notebook and coins

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Method 3 - The 30 days

This is a short-term method to save money fast for a specific purpose. It consists in that on day 1 we save 1 dollar, on day 2 we get 2 dollars, and so on progressively until day 30 we have to deposit 30 dollars in the piggy bank. This method would give us as accumulated 465 dollars.

Of course, depending on your income, you can start with more or less. It can be 20 cents, 50 cents, 5 dollars, whatever you decide.

Method 4 - The 50-20-30

It consists of allocating 50% of your income to pay the fixed expenses of the month (electricity, water, food, etc.), 20% is for savings and 30% for personal expenses (clothes, outings, etc.).

It is simple and easy to understand and allocates an acceptable percentage for savings.

Concluding thoughts

Save money is vital to accumulate wealth and succeed in the pursuit of the financial freedom. Is the action that allow you invest later or affront any urgent situation that can face you.

Tell me, do you now this savings mechanism? Which of them you already use?


*Originally posted on Hive


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Enrique Yecier
Enrique Yecier

Bitcoin, crypto, evolving human being...writer and informatic engeneer

Economy Tips
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