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Savings are an important part of the private economy, but not everyone may have organized savings. Sometimes the reason for this is that you simply do not feel that there is enough money left over, sometimes it is about poor planning and discipline and sometimes it is simply that you opt out of savings and spend the money instead.

For whatever reason, it is not entirely good not to save any money at all

personal finance

There are different types of savings. Buffer saving, short term savings and long term savings. The former is what is most important when it comes to building up a certain buffer as security in the event of problems with the economy, for example through reduced income or increased costs. If you do not have a buffer, it is a priority to spend some money on it.

The short-term savings are primarily about saving for things you want to buy or do, such as a new TV, a car, a trip and such. It is savings that you do not necessarily have to commit to, but if you have plans to buy something in the future, it is clearly smarter to save some money for it than to, for example, buy on installment or be forced to borrow money to afford it.

Long-term savings are instead savings for the future, for example pension, children and a good and comfortable life in the future. It is always nice to be able to put money away for this and if you want a reasonable money to live on when you retire you should not wait too long to start saving.


Getting started with their savings

personal finance

For those who have very poor savings or who have not really started, it is most important to simply get the ball rolling. You may find it hard to get money over saving sometimes, but it is better to put away a little than not to put anything away. If you can start small with a few hundred dollars, it is better than not saving at all and gradually you can increase your savings.

If you have a little too little money to spend on savings each month, a tip might be to review your finances to see if there is anything to do with your spending. If you can cut down on your expenses, you might find a few extra hundred dollars each month and it makes a definite difference to be able to go from savings of eg SEK 500 to SEK 1000.

However, when you start saving, always make sure you set realistic goals for how much you save. Sure you want to do it properly when you get started, but it must be a reasonable goal in relation to how much money you have to move with. If you set too high goals, you are at risk of failure and that it feels painful.

If you have a budget for your finances in the past where you have control of income and expenses (if you have not made a budget this is something you should try) then you can hopefully see how much you can spend on savings. Add savings as your own item and make sure it still goes together. Money that goes to savings is much like money to bills – something that you should put away before you start spending money on entertainment. If you do not put them away immediately, there is the risk that there is nothing left to save at the end of the month.

Start with the buffer

personal finance

If you do not have any money saved as it is now you need to start by creating a certain financial buffer to have as security. This is money that should only be used for situations where you need money to get the economy going, for example, if you were to receive an unexpected expense that you cannot get away from or if your income decreases so much that you cannot afford to pay bills.

Saving to a buffer is not as fun as saving to nice things to buy but it is very important. Such security does a lot for your economy. If you do not have money set aside for such an eventuality and something happens, it can get your entire finances down. Once you start to come up with bills or have to borrow to get along, things go quickly in the wrong direction.

An ordinary buffer may be two months’ salary before tax. It is a bit different from person to person what is right, it depends on your finances. Some want larger buffers and some think less is enough, but it is never wrong to have a large buffer. The more money you have as security the more likely you are to go through all the financial worries you may encounter in the future.


Start saving you too

Start saving you too

There is always something to save. If you have already built up a sensible buffer, you can save for other things, whether in the long or short term. Saving money for something you want to buy is the best way to go if you are to be responsible with your finances. It is better to first save the money and then buy something than to buy first and then try to fix money to pay it.

Saving can take place in many different forms. You can save safely by depositing the money into a savings account with a reasonable return or investing in bonds and interest-bearing securities. There are also a lot of low risk funds that provide a good return over time. If you want a higher return with a higher risk, you can look at shares. However, be sure to collect proper information on your investment types so that you do not risk your money unnecessarily.

For those of you who already have savings, the advice is to first consider if you have a good plan. It is good to set goals and plan how you want to manage your savings. It is also good to spread your investment so that not all eggs are put in the same card. This is especially true if you are interested in shares and investments with high risk.

Another advice is to try to be active and work a little with their money. Just leaving them alone and “contenting themselves” often means that you do not earn as much as you could. Check out different options, change if you are not completely satisfied, gather information and sacrifice some of your time. It’s almost always worth it.


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