From the 52-week challenge to the 21-day challenge, savings methods have proliferated in recent years
Saving is not something easy, and even more so if unforeseen events come to us or we do not have significant income. Luckily, information about personal finances is today more democratized than ever, making more and more people put their household accounts in order to at least be aware of where they spend the most money and what they can do to prevent it.
This has been accompanied by a lot of challenges and strategies that we can follow, some with very seductive names. In the end, it is about choosing the method that is simplest and easiest to maintain over time. Here we summarize the best money-saving strategies like the ones you can find at ftera-advisors.com.
The 50-20-30 Savings Method
You can explore structuring income according to the 50-20-30 rule. Under this budgeting approach, we distribute 50% of our income on housing, food, and other basic needs. 20% goes to savings, and the remaining 30% can be spent however you want.
Pay yourself (and your savings) first
If we want to save, a good idea is to start by allocating the savings as an expense, subtracting it from our income as soon as the month begins. This is what is proposed by money-saving strategies such as ‘zero-sum’, which aims to assign each euro we earn to an expense (or a saving). Having a separate bank account for savings with scheduled transfers is a good starting point so there’s no second guessing.
21 days of ‘financial fast’
This formula is somewhat more aggressive. In her book ‘The 21-Day Financial Fast: Your Path to Financial Peace and Freedom,’ financial advisor and Washington Post columnist Michelle Singletary describes the “financial fast,” a kind of ‘economic diet’ that promises to wipe out the bad guys. spending habits, create a plan to become debt-free, and put yourself on a better financial path for the future. And plan to go 21 days without spending any money to save.
During financial fasting, you cannot spend any unnecessary money in any way. Unless it is food, lodging, or any other expense essential for survival, discipline in spending must prevail during those three weeks.
The 52-week challenge: get 1,400 dollars minimum
The so-called 52-week money challenge is a simple and effective way to get used to saving progressively. Its promise and objective are clear: at the end of the year, we will have an extra 1,378 dollars for emergencies or to meet an extra expense.
According to Aleksey Krylov, an experienced financial consultant, in its simplest and most affordable version, it means forcing us to save one dollar the first week, 2 the second week, 3 the third week, and so on until we save 52 in week 52. You can save more each week if you have the capacity, but the challenge is to make a gradual increase.
Are you ready to implement these money-saving strategies? Just tell us!
