At the end of the 20th century, researchers published the results of a study of human attitudes to money, budgeting, and the ways to save money. The results were highly curious and were presented in a style favoured by the public, where each type of behaviour is named after a particular animal.
Moles (27%) are all sorts of marginalised people who don't care for tomorrow. And they have no idea whatsoever what savings are for.
Hens (60%) are the vast majority; these people cover their own needs, which are often pretty modest, working for other people's goals: wage earners, civil servants, and even entrepreneurs sometimes. Their primary source of income is a salary or a modest income.
Monkeys (10%) are a tiny proportion of people who mimic the behaviour of the most successful strata of the world's population. They are hard-working, results-driven, disciplined, and self-assured. They intuitively know how to save money and how to achieve sustainable growth.
Cats (3%). They spend most of their time not working but thinking, planning, and accumulating energy, scheduling at the right moment to catch a gaping, unguarded mouse. Cats are the most efficient predators. They are intelligent and put their personal goals at the head of the universe. They have devised every known way to accumulate money and make it work. All money-saving tips are designed by 'cats.'
The research study has shown that changing the type of mindset is possible. And to achieve financial well-being, this is the first thing a person should do, according to scientists.
There are three main rules of how to start saving money:
- Planning. Set long-term and short-term goals, big and small. Split the big ones into smaller ones.
- Record income and expenditure, i.e., keep a budget. Analyse expenses and failures as well as successes. It is crucial to know whether the hit was accidental or not.
- Study financial literacy. Monetising your knowledge and skills is a vital skill.
There are myriad strategies for saving money, but they all boil down to four fundamental theses: count, conserve, save, and make money work.
What is the best way to save money?
In autumn 2022, several recommendations were published on how to save energy at home. But saving money shouldn’t make your life worse. Quite the opposite.
Sharing communities and swaps, 2-for-1 discounts, and sale days such as Black Friday or Cyber Monday. These are all convenient and easy ways to save money. Make a list of stuff you want to buy and places to go, and keep an eye on it. Auctioneers have some helpful financial tips for saving money: always write down the maximum amount per item that won't hurt your budget. Determine how much you're willing to give for an audio speaker, rollerblades, or gym membership. This will help you keep a cool head when you see the words SALE and DISCOUNTS.
Subscriptions, special apps, referral links, and promo codes can also save you money. There is a reason why marketers are conjuring up these tools. Reading and listening to books, going to the cinema, and travelling can be cost-effective or even free, thanks to these tools. Create a chat room with your friends to exchange valid promo codes, loyalty reward programs, and save money tips.
Buy summer clothes in winter and winter clothes in summer. Christmas sales are great but only sometimes budget-friendly. Buying thermal underwear in the summer is cheaper. There won't be much variety, but the quality will be the same. This is another vivid example of how to spend less money.
How to put money aside
Europeans keep about 36% of their savings in banks. A large part of these savings (56%) is in securities and pension funds, with the rest invested in real estate, according to New York University research.
Storing money in different currencies is one of the critical principles of capital accumulation. The Japanese yen, USD, and Swiss francs are the top currencies for savings. And also the currencies of developing countries: the Turkish lira and the Hong Kong dollar. This year has shown that investments in emerging markets currencies have paid off and yielded returns.
The best way to save money is to earn more. The investment code is straightforward: buy when it's cheap, sell when it's expensive. And remember to invest in yourself.
