10 practical ways to save

Of course, the focus has always been on increasing active income and not so much on saving. However, setting a budget and saving are the main steps in building a prosperous life.

So, with that idea in mind, I decided to write a practical article again, with lots of useful ideas and solutions that you can apply starting today to save more money.

In one of the recent posts on the Money Science group, the topic of saving was debated, and the post attracted over 200 comments. So, I come up with ideas, and to see them flush them out, it's really fun.

I've written about saving or "accumulation" in the past (a name I like a lot more). This process does not have to be painful, a process in which you curb your desires or say NO to any temptation in your life.

We shouldn't live a dull life just to raise money. We can make savings without being frustrated and without gritting our teeth every time we pay for a good.

To be able to save without having an uncomfortable lifestyle, you just have to respect the balance between desires/needs and income/expenses.

In other words, from the moment you decide to start saving, your standard of living should be based on your income, from which you automatically deduct at least 10% of your savings.

As mundane as it is effective. When your money came in, you transferred 10% (or as much as you want to save) into your savings account.

Ideally, immediately after, the money from the savings account should be invested so that you no longer have access to them so easily. Of course, if you don't raise money for something specific.

The money you have left after you have transferred the 10% (or the set percentage) to your savings account is the spending money.

And in addition to this aspect, you also have to take care of what you want and what you need to live a comfortable and fulfilled life.

Let's move on to more practical things.

Let's discover together 10 of the most common ways you can save money every month.

10 ways to save money that you can put into practice today!

1. Optional pension

One of the first ideas I noticed in the comments on the group post was the voluntary pension. This method, also known as Pillar III, is a very attractive one for many Romanians.

Saving through this option comes with a major tax advantage: contributions to the optional pension, up to 400 euros per year, are exempt from paying income tax, which is 10%.

In addition, the money you allocate to Pillar III you receive a better-annualized return than that of bank deposits, for example.

In 2020, FSA reported yields of between 3.7 and 6% for these instruments in November (the last month available during the reporting period). However, you should also be careful about the fees charged by the funds that make such instruments available to you.

2. Zero Day - the day when you spend nothing

A method that is becoming more and more common in our country, this is more of a challenge. It means choosing one day each month to try not to spend a single penny.

Of course, in the event of a medical emergency or another serious unforeseen event, this challenge will not stand. However, it would be interesting to align our monthly payments in such a way that there is a day or even more to take a break from spending.

3. Cashback programs and applications

Using cashback applications, such as cashclub.ro, but also buying products from sites that accept cashback policies is an extremely good way to save money.

You can order your favorite products online, and with each order, you can save between 3 - 5 - 7 or even 10% of the order, depending on the policy of the respective site.

Newer, even Revolut offers such a possibility, on partner sites.

4. Vault Applications

If we keep talking about Revolut and the saving opportunities that the application offers us, the Vault (Safe) functions on such cards are excellent saving tools. How do they work? For each payment we make, if the payment is not a fixed amount, the remainder is rounded up and stored in an in-app safe.

For example, if we spend 4.51 euros on a product, the Vault function will automatically round the amount to 5 euros, keeping the 49 cents in the form of savings.

5. Applying Food Mindfulness

Another idea noted in the series of comments on the post about saving methods was food mindfulness. This requires us to be aware of the need for food consumption, eliminating food waste from our lives.

According to studies, we consume on average 30% more than we should. In addition, we always buy much more than we consume, and then we throw away the food.

Nobody says we should stop eating to save money. We should simply strike a balance between what we need and what we buy.

It is also much better to eat healthy and as much as we need than a lot, stupid and wasteful. It's also unpleasant to have to keep cleaning your fridge to throw away what has become obsolete.

6. How much do you earn per hour?

It seems to be the most effective way to eliminate waste. You simply calculate how much you earn per hour (from work, freelancing, business, etc.) and when you want to buy something you calculate how much it costs (in hours). Then see if it's worth it.

For example, let's say you have a net salary of 8000 RON per month for 160 hours (40 hours per week X 4). This way you earn 50 RON per hour.

If you want to buy a 4000 RON phone, it will cost you 2 weeks of work. Giving cigarettes 800 RON per month costs you 2 days of work. You are too lazy to cut a 50 RON subscription that you pay but it is no longer useful to you - one hour of work every month and so on…

It is a very useful method, especially for those unnecessary expenses that we make out of convenience. Surely you don't want to waste hours/days working for tampons.

7. Shopping list

No matter how cliché it may sound, the shopping list is probably the one that will help you save the most on food. You can also link it to food mindfulness, the list could help you clean up what you buy just for fun and what you need to eat healthily.

In addition to the list, choose to buy the products from a cheaper store, possibly where you can pay by card, to benefit from a coupon or maybe even the benefits of cashback programs.

Also, remember that the most visible products in a supermarket are not the best but the most expensive (manufacturers or distributors have paid to be visibly positioned). Also, check the bottom or top shelves of the supermarket.

By combining 3 techniques in one you will become a real money-saving machine.

8. Double or Nothing method

I also noticed a very good saving idea in the comments on the post on the Money Science group, where various ways to save money were discussed. One person said that she applies a very bold principle every time she makes a fad.

As much as it costs the fad, she puts it aside in the form of savings. So, if he wants to buy a product for 100 lei, he will collect another 100 lei in his savings account. Double or nothing, in other words. It is a method of "punishment" and "reward" at the same time.

A very challenging challenge that you can try tomorrow.

9. Use of expense management applications

These applications can help you to have clear management of your expenses and to see where and where your money is going. And once you start to see formed habits and certain patterns, you can start to streamline from month to month the expenses for certain categories.

You can use applications such as CashControl, Monefy, Cashbase, or the classic excel table.

You can see here a list of the most used money management applications.

10. The car you buy

The car is one of the biggest expenses in a person's life.

It costs a lot when you buy it (especially on credit), it consumes money every month, it needs repairs, and insurance and you also pay tax because you own it. In addition, you have to change it after a few years.

So if you buy a car far beyond your means you have all the chances to work hard for it for months out of a year. Wouldn't it be sad to work 1-2 months a year just to own a car?

In order not to burden you unnecessarily, I recommend that the price of the car does not exceed between 3 and 6 monthly incomes (of your family or yours if you are alone).

And when you decide you want to save money, remember that this process doesn't have to be a hassle. You can save money and save money without being frustrated. Follow any of the above ideas and the results will not belong in coming.

And don't forget, always give your savings a purpose. This will help you visualize that money saved in another way and will always keep you motivated.

The money saved and then invested can bring you years of freedom.

See you soon!

P.S. If you like to read while drinking coffee, you can offer me a coffee too.