Smart Saving Strategies: How To Optimize Your Personal Finances

First of all, you should change your mindset about personal finances, budgeting and everything concerning money. Yes, you should be strategic, but it could be fun, too. After all, you are working to make your future happier and safer.

1. Be open-minded but cautious

Do you enjoy online casinos? Nothing wrong about it, many people use this as a form of investment. However, it is important to consider the platforms and companies you entrust with your money, focusing only on legal real-money casinos where your funds are protected and regulations are enforced. The same goes for any platform you use for banking activities, budget analysis, stock exchange, or savings. 

2. Set a realistic budget

Again, you shouldn’t see this activity as restricting, but as liberating. Setting a budget helps manage your personal finances with awareness, creating a fund for your wishes and leisure activities. Take your monthly income and divide it like this:

• 50% for needs (rent, mortgage, taxes).
• 30% for wants (clothes, movies, hobbies, nights out).
• 20% debt repayment (including personal loans) or investment.

Create a list of all your needs, wants and debts or investments in order to better understand this division.

3. Automate everything you can

Budgeting may seem difficult if you do everything manually, but technology is your best friend in automating tasks. Most bank apps and digital wallets allow you to create automated payments. For instance, those toward rent or mortgage, or your car payment. They usually happen on the same day every month, so you should set an automatic bank transfer and forget about it. Debt repayment and investment funds are also areas where you can automate the transfer each time you receive your salary.

4. Think long-term

First of all, try to set up an emergency fund. It should be approximately the equivalent of three or six months of salary. You can automate what amount of money to direct there every month, too. Once you have it, you can feel safer about possible emergencies. Now start investing. Think about it like this: you are not merely moving money, you are making them work for your future. A penny invested is a penny that works for you, giving your future self more stability and happiness.

5. Cut everyday expenses, but avoid sacrifices

It’s easier said than done, but will be extremely rewarding. Make a list of everything you’ve paid in the last month, last trimester, last semester or last year and look at it analytically. Is there something you don’t really need? For instance, a streaming service you don’t watch can be easily cut, while the monthly hair and make-up appointment that makes you feel pampered and happier could be seen as a sacrifice. Make your personal decision about what’s essential and what’s not.

6. Approach debt strategically 

Debt can be a major obstacle to financial freedom and a huge burden on your shoulders. List all your debts, including interest rates and balances, then decide on a repayment strategy. The most famous are the avalanche and the snowball methods. You can read about them more in-depth here. Remember that 20% of your income set aside for debt or investment? If you feel oppressed, relieve yourself from debts first. Otherwise, you can split 10 and 10%.

7. Have a clear goal in mind

Give your money a purpose and keep it in mind. Are you saving and investing to buy a house, to retire early, to ensure your kids go to college, to renovate your home, to open a new activity? Write it down where you can see it (your office wall, or a magnet on the fridge) and periodically review your progress in order to reach it.