Financial reserves

Even creating money reserves in a personal or family budget has its rules.

A young man can save before starting a family, but also a grandparent who wants to make it easier for his grandchildren to start life.

For saving as well as investing, it is true that one should first build up financial reserves, and only then start embarking on further appreciation of one’s money. According to a number of banking experts or financial advisers, one should create a financial reserve of three times his or her regular monthly expenses.

This money is used in case a person loses their job or for the sudden purchase of household appliances such as a washing machine or refrigerator. Even an expense of 10,000 crowns can surprise a person living from paycheck to paycheck.

The first and second step to creating financial reserves

The first step in creating financial reserves is the accurate calculation of monthly expenses. If a person has expenses higher than income, there is something wrong. There are two ways to balance personal or family finances.

The first is to reduce spending and the second is to increase revenue. For example, by asking your employer to increase your salary or to find a better paid job or part-time job.

The second step in creating financial reserves is to open a savings account. The most suitable is one that is kept free of charge and the interest rate does not depend on the amount of funds. The claim that everyone keeps a certain amount of money in their personal account is not true. Everyone is tempted to spend more than they really need.

How to save at home

Everyone can save about a tenth of their monthly expenses by reducing part of their consumption. The savings should not be at the expense of necessary expenses such as non-payment of rent or energy.

One of the quick ways, for example, for a family of four to reduce their expenses and thus save something, is to reduce the consumption of delicacies or the consumption of lemonades. Reducing the number of cigarettes smoked or visiting restaurants also saves money. It can be hundreds of crowns a week.

If all family members commute to school or work within the city, it is worth considering not to provide all members with quarterly or annual public transport coupons.

Similarly, you can save money by choosing a suitable mobile tariff. If family members often call each other, it is worth considering switching to one operator and having the price paid. This often saves on individual flat rates and the family has cheaper calls and sending SMS messages.