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A savings guide for everyone
Saving is essential at any stage of your life. Whether it’s buying a car or creating an emergency fund, saving makes it possible to realise dreams and provide for the future.
According to data from the National Statistics Institute (INE), the savings rate in Portugal in the first quarter of 2023 stood at 5.9 per cent, down from 6.9 per cent in 2020. In contrast, the average for the eurozone in the same period was 14.1 per cent, as reported by Eurostat.
Although we emphasise the importance of saving, we know that it’s not always easy to do so. Inflation since 2022 has made this task even more difficult.
However, we don’t want to discourage you from saving!
Read our suggestions and learn about some strategies that can help you save effectively at every stage of your life.
From 18 to 30: The beginning of adulthood
1 – Determine your monthly expenditure
Although you may be aware of the areas in which you spend money (food, leisure, housing, health, transport, etc.), it can be difficult to determine the weight each one has on your final budget.
So it’s essential to do the maths to see how much you can save by making a few adjustments.
2 – Save part of your salary
It’s important to define how much of your salary you can put into savings.
It’s also important to put this money aside at the beginning of the month to avoid unnecessary spending. It may be a good strategy to schedule automatic monthly transfers from your current account to a savings account.
3 – Start making low-risk investments
At the start of your working life, savings are low and your professional situation may not yet be stabilised. It’s therefore best to start with low-risk investments, such as Savings Certificates and Treasury Certificates.
From 30 to 40: A phase with new goals and responsibilities
1 – If you’re thinking of buying a house, compare credit proposals well
When you need to take out a mortgage, don’t accept the first option presented to you by the bank. Instead, analyse the credit conditions using the European Standardised Information Sheets (ESIS).
2 – If you have already accumulated some credits, you can consolidate them
If you have at least two consumer loans in addition to your mortgage, consolidating them can be a way of saving money. Paying off a single instalment of credit ends up being cheaper than paying them off individually.
Depending on the conditions you agree with your bank, you could save up to 60 per cent.
3 – Keep track of your spending
As in the previous phase of your life, this is a habit you shouldn’t abandon. As we’ve seen, there may be an increase in obligations and associated costs, so it’s essential to know where your money is spent.
Once again, this record will allow you to know how much you can allocate to savings and strengthen your emergency fund.
4 – Make riskier investments
If you’re willing to take more risks than in the previous stage, you can look into investment funds. These solutions also have different levels of risk, with treasury funds leaving you the least exposed.
From 40 to 55: Boosting savings
1 – Do you have children? Start preparing for their future
For those with children, this is the time when education expenses can eat up a significant part of the family budget. Even so, you can save on some expenses, such as school supplies, and put that money into a savings account to safeguard your child’s academic future.
2 – Consider amortising your loans
If you can afford it, you could consider repaying your mortgage and thus reduce the amount of instalments you still have to pay.
3 – What should you invest in?
If you haven’t yet created a PRR, now is the time to do so. It’s also important to diversify your investments and not put everything in one place. If you can afford it, you could also take the risk level up a notch and take a chance on products such as equity funds.
For more tips on how to save money, consult the professionals at Lucrivolume. They are entirely at your disposal to help you increase your savings fund and maximise the return on your money.