Eight tips to be prepared for a crisis

The comparator Helpmycash has drawn up a list of tricks to reduce expenses and multiply savings on the occasion of Financial Education Day

Facing household expenses without ending the month in the red is an increasingly difficult task. All items have become more expensive, from food, to housing, supplies and fuel. Inflation has been making a dent in the pockets of many families for months and many will not last much longer under these conditions. In fact, the picture may even get worse if the world goes into recession. On the occasion of Financial Education Day, which is celebrated this Monday, October 3, the financial product comparator Helpmycash has drawn up a list of tips to spend less, save more, prepare for a possible crisis and, ultimately, to improve your financial education.

1. Stop eating out

Ordering food at home or eating out is a pleasure that can be given up, at least partially, if you want to save. Reducing the number of orders and outings and choosing to cook more at home can lead to considerable savings. According to Helpmycash estimates, eating with a daily menu (approx. 12 dollars) from Monday to Friday can lead to a monthly expense of 240 dollars. Reducing these meals from five to three a week will already save almost 100 dollars, exemplify the financial experts at Helpmycash.com.

2. Take an expense control

The most basic way to save is to know where your money is going from day to day so you can see which expenses are necessary and which can be reduced or eliminated. To do this, you can start by making a list of all your monthly expenses, including those that are automatically debited from your bank account (rent, household bills, Netflix subscription, etc.). Another basic tip is to avoid compulsive and unnecessary purchases.

3. Don’t go shopping hungry

This advice form is a classic. Shopping hungry will trigger your receipt. To avoid filling your shopping cart with items you don’t need, make a list, avoid going on an empty stomach, and try to stick to your budget, but it’s okay to indulge once in a while. On the other hand, comparing prices can also make a difference. And it is that choosing the cheapest supermarket can lead to an average saving of 994 dollars per year in the shopping cart, according to a recent study by the OCU.

4. Turn off the lights

Turn off the lights when you don’t use them, “wash clothes with cold water, use energy-saving lamps, turn off the television instead of leaving it on stand-by, put the heating at 20 or 21 degrees or something as simple as covering the pot cooking will help you save a good handful of euros each year on bills”, explains the director from Helpmycash comparator. Another very useful exercise is to take a look at the rates offered by the competition, both for electricity, gas, water, internet and any other contracted service.

5. Create an emergency fund

The best weapon to prepare for a recession is to save and create an emergency fund. From Helpmycash they recommend saving the money equivalent to the fixed expenses of six months. In this way, if you run out of income, the fund will allow you to subsist for a reasonable time while you look for another job. For example, a person who spends 1,000 dollars each month on rent or mortgage, transportation, food and paying debts should have 6,000 dollars saved.

6. Recover the piggy bank as a method of saving

The piggy bank, the most traditional savings method, can also be the most effective. But you can resort to an updated version, opening a virtual piggy bank in the bank. They are subaccounts that allow you to separate money from day to day to avoid spending it . Another trick to save and avoid overspending is to split your payroll. You can separate it into several parts and, right when it goes into the account, divide the money into several accounts or piggy banks.

7. Invest to multiply savings

Current accounts are usually the piggy bank in which most citizens accumulate their income, but practically no entity rewards them with interest. For this reason, it is convenient to bet on other products to multiply the savings. Now that the rise in rates by the Central Bank has pushed up the profitability of savings products, deposits and interest-bearing accounts are a more attractive option for the most conservative profiles . The best deposits allow you to earn more than 2% APR with the guaranteed capital. Those who want to earn more can start investing. An easy way to take the first step is to bet on an index investment fund, for example, the S&P 500,although we must not forget that investing always carries risks.

8. Avoid credit cards

Every time you buy something in installments with a credit card, you will have to pay interest, for example, 18% or 19%. To avoid becoming over-indebted, it is better not to use these cards or to do so responsibly , paying everything at the end of the month without interest and using them only to finance specific short-term expenses.

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