1. 1. Specific: Aim for a concrete goal, not just saving for the sake of saving. For example, set a goal of paying the down payment on a flat, or having a minimum fund for emergencies.
   2. Measurable: Set a specific savings amount such as €100, €200, or €500, but something measurable and fixed.
   3. Achievable: Set a realistic goal. If you earn €1,500 a month, don’t try to save €700 as it will be difficult. Be as ambitious as you can but within your capabilities.
   4. Relevant: If your savings are going to be a big effort, your goals have to be worthwhile. Set a strong goal that will keep you motivated and keep you on track.
   5. Deadline: set yourself a date to achieve your goal; this is the way to see your progress, to motivate yourself and to achieve what you set out to do.

 

Also, what happens if your income level is low and you don’t manage to save the 20% that the 50-30-20 rule states? Some tips that can help you and that, with a lot of effort, you will have to put into practice are:

• Try to keep your consumption of water, electricity or gas to a minimum and/or optimise it in order to reduce basic utility costs.
• Look for housing that is more in line with your financial situation and reduce your rent payments.
• Nip superfluous leisure expenses in the bud, such as buying clothes, subscriptions to platforms that you don’t use much or try to eat out less.

 

Paying off debts

Having accumulated debts is a major obstacle to setting up a savings plan. You will find that a large percentage of your income has to go towards interest-laden monthly instalments that will weaken your ability to save. If this is your case, what we recommend, as you save, is to get rid of your debts and, most importantly, not accumulate more.

This means avoiding the use of credit cards and looking to cut back or end your bank loan or mortgage repayments as soon as possible.

To be financially free, you cannot owe money to anyone or any institution.

Get new sources of income

Perhaps it happens that, at an early stage of your financial freedom plan, your income is lower than you need to start saving and investing. In this case, your duty is to look for new sources of income, either by looking for a second job or by obtaining passive income that will gradually generate money with minimal effort, such as: participating in the crowdfunding of a project or company, opening and creating content on an affiliate blog, creating a youtube or twitch channel with content that generates income, setting up a place or home for tourist rental or coworking, or the most common way, which is to buy and sell on second-hand marketplaces.

There are solutions and ways to get that extra boost to your income, you just have to be creative and go for it!

Investing with a conservative mindset

Here are 4 conservative financial investment products that should be on your radar:

1. Fixed-rate savings accounts:

There’s nothing like the simplicity of a good savings account. Plus, high-yield savings accounts offer you decent interest on your money, without having to worry about losing it along the way. It’s like putting your money on autopilot and watching it grow little by little.

2. Certificates of Deposit (CDs)

CDs are like the reliable granddaddy of investments. Basically, you deposit a certain amount of money with a financial institution for a fixed period of time, and in return, they pay you interest. It’s a safe way to earn returns without worrying about market fluctuations.

3. Treasury bonds:

Want to invest in something backed by the full faith and credit of the government? Treasury bonds are your answer. They are basically loans you make to the government and get paid interest on it. They are also considered one of the safest assets you can have in your portfolio.

4. Real estate products:

Although it is a very variant market and fluctuates much more than others in the investment world, there has been a boom in acquiring property in recent years. One of the main purposes of this action is the intention to rent to obtain an income either in a long term rental model or in a rental model.

Investing without fear of losing

If you don’t mind taking on a little or a lot of risk and you want to try to make the most of your money, you can invest it in financial assets. Remember that investing in the stock market is not the same as investing in cryptocurrencies or in real estate investment funds, i.e. each investment product has its own characteristics and risks, so you should analyse them before defining your investment strategies. Return, risk and liquidity are interrelated. In other words, the more profitability an investment can give you, the more risk you will have to assume and, in general, the less liquid it will be.