The Importance Of Saving Money
In economics, when a company has a higher level of income than expenses, the result of subtracting both items is called profit. In families, when their income is higher than their expenses, this positive difference is called savings. It is evident that anyone would invest more in those companies that generate more benefits, therefore (in the same way that happens with the companies) they should invest in their savings: in this way they will increase their comfort and tranquility in life.
Plan Your Saving
Savings planning is fundamental to achieve the vital objectives desired by each family and individual. The first step is to make a detailed analysis of one’s assets, followed by an analysis of income and expenses. Entering into the subject of income, the financial educators certified by the Association know that the best way to increase income, income (since in most families, income comes from wages), is to increase training through additional and continuous training.
A good example is found among our members and the achievement of their financial educator certification. Some are people who are entering the labor market and see a good opportunity in this profession, others come from positions related to the world of insurance, finance and other types of consulting, such as tax advisors.
Some also come from other fields of activity where they want to turn their professional life around or simply embark on new paths. In all these matters, the Association is concerned that our associates are trained to a high degree of quality, that they are constantly informed and are aware of all the new developments that arise; likewise, we provide them with tools, constantly updated, with which to facilitate their work with the highest standards of quality, reliability and efficiency.
The other aspect is that of expenses, a subject that is always difficult to deal with. For the Association, it is essential that people have and monitor their expenses, knowing what and how much they spend their money on. This aspect is fundamental, people can change and improve our consumption habits, and most of them need help for this exercise.
Within the expenses, an item to which we attach special relevance is the indebtedness and the way of getting into debt. In this publication, always with the aim of being practical and usable, as well as the training that our quality financial educators receive, indebtedness has a special focus. Our endeavor is to see the levels of indebtedness, how it has occurred and, in many cases, to try to correct difficult situations for the people who come to us.
We are not going to offer loans, credits or other types of financing, we are totally independent and we are proud of it; however, we can analyze the proposals received by the people. In this analysis we will be able to show the differences and which ones provide the best conditions. We can even suggest delaying the indebtedness, leaving the object of the indebtedness for a later date.
Normally, in many books and documents, it appears that the income should be distributed in the following proportion: 50 % fixed expenses, 30 % in leisure or secondary consumptions and, the last one, 20 % destined to the saving.
This is a general picture that may not fit all the profiles we analyze, hence the importance that leads us to study and know the profile and situation of the people and families we deal with. In our work we have realized that this is indeed idyllic but not always feasible. The important thing, beyond the percentage, is to allocate part of our income to our savings.
Incorporating the savings item into our budget is the fundamental idea: in some cases, it will be below that 20% and in others, it will exceed it; however, saving is a necessity and must therefore be incorporated, as we have said, into the family budget. Not only incorporate it, but also revise it periodically. Savings cannot be what is left over at the end of the month, it is what we need to build up a patrimony that will allow us to achieve our vital objectives and to be able to face unexpected situations without stress.
We fully share the idea that the more detailed our budget is, the easier it will be to save, an endeavor that seems to us a totally steep uphill and difficult to overcome. Once again, we will never tire of repeating it and encouraging people, the better, more detailed and revised the family budget is, the easier it will be to save. Achieving savings goals will also increase the security and confidence that it is possible to save.