Learn all about the 1% method to start saving

doYou want to save but you can’t? If on some occasions you have proposed to fulfill your most desired dreams such as having your own house, a car, saving for your children’s university or a well-deserved vacation, and luck has not been on your side, that could be because you do not have an adequate financial education.

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The dreams that you long for so much can be fulfilled as long as you make correct use of your economic resources and, for this, you must take into account a series of recommendations to avoid spending money on unnecessary things or that later complicate you when saving .

But just as there are people who spend their savings unnecessarily, there are those who are unable to take the first step to collect their income, no matter how small, but with time they could see positive results.

Most people decide to save little by little in banks, municipal savings banks or in different modalities with the aim of seeing their money increase; However, there is a method that perhaps few know and that will help your finances.

WHAT IS THE 1% METHOD OF SAVING?

If you want to save a certain amount of your income to meet your future plans, the only thing you should apply is the 1% method.

The portal businessinside unveiled the essential 1% strategy so that anyone who has a hard time saving can take the first step and meet their goals or for those who have tried it but did not have good results.

Although it may seem complicated, this formula will help you start saving and do not fail in the attempt. In other words, you will be able to save increasingly and your money will increase month after month, which will be very beneficial for you.

HOW DOES THE 1% SAVINGS FORMULA WORK?

If you have already made the decision to save and want to learn this formula, all you have to do is correctly follow the three steps that we will detail here.

Step 1:

The first thing you should do is have a budget and for this you can help yourself with an Excel table or use an application on your cell phone that helps you save and control your expenses. With this you will know what your income and expenses are so that you can determine what you will use for your expenses month by month and the amount you could save.

When you have your budget ready, you must keep it for a minimum of 3 months so that you have reliable information. The riskiest decide not to do that step and go directly to the 1% method, because your economy will not notice the difference if you subtract that amount each month.

Step 2:

The savings. As its name says, you should start saving 1% of your income; that is, from what you earn monthly you must subtract that amount. Although the amount is not much, it will be the first step and the starting point for adequate finances.

Once you set aside the 1%, you must place it in a checking account other than the one you always use or where you receive your wages. It can also be an interest-bearing account or a savings account. What you should keep in mind is that this account should not charge commissions, because it would subtract your savings.

Step 3:

In this step you will see your savings grow, because the amount you saved month after month did not cause you any concern. By being here you could also increase the amount you save each month by 1%. Therefore, if you have saved 100 soles monthly, the next month you will have to save 101 soles. Another way to save at this stage is that it is no longer 1% but increases to 5%.

In this way you will be able to see savings month after month and continuing in that line will help you fulfill your dreams. It should also be noted that specialists have indicated that a person should save between 10% and 20% of their monthly income.