Karolina Decker is co-founder of Finmarie and financial expert. Finmarie
In times of rising prices, it is becoming increasingly difficult to limit spending and save sustainably.
Financial expert Karolina Decker shares four tips on how you can still manage to spend less and save.
A tip: You should meticulously document your expenses for two months – this will help you to identify major cost items.
Inflation was also over six percent in May – experts assume that inflation could pick up again in June. In times of constantly rising prices, more and more people are looking for ways to use their money more efficiently and at the same time save something for the future.
Whether it’s building a reserve for contingencies or saving long-term for specific goals, Karolin Decker, financial expert and co-founder of Finmarie, gave Business Insider four tips that can help you spend less while saving.
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In a world where consumption is omnipresent and constantly tempts us to spend the money we earn on unnecessary things, it is all the more important to be conscious of our finances.
1. Document expenses
“Document your expenses for a month or two,” Decker explains. This may sound banal at first, but it is one of the most proven first steps to gain potential savings. Then you should critically question your expenses and also compare offers.
As an example, Decker cites the mobile operator or streaming service. Here you should ask yourself whether there is a cheaper offer or whether you really use the streaming deanst.
In addition, documenting expenses can also help to save in everyday life. “Does it always have to be the coffee to go every day? Or the branded products from the supermarket? Small sums can add up quite a bit in the end,” says Decker.
2. Set realistic savings goals
“Realistic and positive savings goals are the be-all and end-all for sustainable success when saving,” says Decker. “To make your finances feel fun rather than a chore, you need a positive vision.” Decker says you can create a positive vision by thinking about what your life could be like if you were more financially independent.
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Decker explains that you can imagine, for example, traveling more or working less after a certain age. These positive goals should help you stay on track. It is very important for the implementation, however, not to overdo it at the beginning. “We often don’t know where or how to start. Don’t let that put you off, but don’t overdo it either.” That means: It’s better to start with small amounts and increase them when you realize that more is possible.
3. Follow the 50-30-20 rule whenever possible
According to Decker, the 50-30-20 rule can help you organize your finances and define how much you can put aside each month. “The rule is based on dividing the monthly net income into three spending categories: 50 percent for basic needs, 30 percent for personal needs and 20 percent for savings.” Basic needs are things like rent and groceries, personal needs are everything that you spend in your free time.
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“In this way, you also have a concrete overview of the amount available to you for which expense category,” explains Decker. But she also warns that the rule is not so easy to implement for everyone. For example, people who live in big cities may not consistently implement the 50-30-20 rule because their rent or the cost of living in general is often significantly higher.
4. Don’t just save money – invest too
“Small animals also make crap,” says Decker and that also applies to investing. However, you should approach it long-term and continuously. “Instead of ‘just’ regularly saving your money in the call money account, you can also invest a fixed amount every month,” advises Decker.
With an ETF savings plan, this is possible from as little as 25 euros per month. “Due to the long-term nature and return, you will see growth in your assets despite this supposedly small amount.”
Disclaimer: Stocks and other investments are always associated with risk. A total loss of the invested capital cannot be ruled out either. The published articles, data and forecasts are not an invitation to buy or sell securities or rights. They also do not replace professional advice.