2023-11-04 09:26:44
Bogotá — The penultimate month of the year has arrived and with it the December expenses that are already beginning to be felt. Therefore, saving becomes an ideal tool to adjust your budget, acquire that good or service you want, or foresee the management of medium or long-term situations.
And although saving is vital when talking about financial issues, according to recent data collected by Asobancaria, only 42% of Colombian adults save or invest, which means that out of every 10 people, only 4 allocate part of their income for this purpose.
In that sense, these are five common mistakes that are made when saving, according to the investment platform tyba:
1. Not prioritizing savings in the monthly budget: many Colombians simply wait to see how much money they have left at the end of the month to save, which often translates into ‘I have nothing left to save or I can’t afford it’. The recommendation of financial experts is to establish a fixed amount or percentage, according to each person’s possibilities, for savings, treating it as a “mandatory expense.”
This will allow you to separate that proportion of money once you receive the income and not spend it.
For this, there are different formulas, for example, the Harv Eker Method, the author of “The Secrets of the Millionaire Mind”, who proposes distributing income into 6 different categories as follows: 50% fixed expenses, 10% savings, 10% investment, 10% leisure, 10% education/training and 10% donation.
2. Mix spending money with savings: the convenience of having everything in one place can be tempting, but this practice can be counterproductive, since spending on obligations or leisure is often complemented with the money It is meant to be saved.
The solution is to separate the money from fixed and variable expenses from savings and investment, to ensure that you do not touch that capital.
3. Leave savings standing still: standing money loses its real value over time due to inflation. This indicator reflects the variation in the basic prices of an economy in a specific period, therefore, with high inflation, the purchasing power of Colombians is reduced.
As a result of the above, it is essential to invest, but also to seek returns above inflation for a basic reason; In real terms, for every $100 you have, if you discount the annual inflation percentage (currently it is around 10%), your money is already losing that value. Investments should cover at least that “loss” in value.
4. Not setting clear savings goals: Savings without a defined purpose can be less effective. Not setting clear savings goals often results in a lack of motivation to save and the temptation to spend money on impulsive purchases, so you must have clear short, medium and long-term goals, such as buying your own home, changing car, buy a bicycle or finance your children’s education; clearly enhancing said savings with investment.
This allows a clear motivation to be generated to save constantly.
5. Spend a part of the savings thinking about completing it later: something very popular among Colombians is to use the money saved on unforeseen expenses to complement a purchase or to lend to a friend, ensuring that it will be completed later.
So that these situations do not happen without planning, it is important to allocate a proportion of your savings to this type of case in advance in your monthly personal budget, for example, by having an emergency fund.
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