The main mistake when setting a financial goal is the desire to save money to buy a specific thing, Olga Matveeva, a financial consultant for the X5 Package service, noted in an interview with RT.
“This usually happens with major purchases – a car, real estate, travel. The problem is that when this goal is achieved, a person experiences immediate joy, and then – devastation. After all, all the results of hard work went to one single thing. In addition, this approach lacks rationality – any person needs savings for an emergency,” the expert explained.
A smart strategy is to create a financial safety net, she advised.
“You set your own limits on spending money from these savings. Some people prefer not to touch the amount at all and make exceptions in emergency cases. Some people are comfortable spending these funds on large purchases, but only as they are objectively necessary. Let’s say a refrigerator breaks down at home – you should buy a new one. Or replace a car because the old one is faulty,” the specialist gave an example.
However, according to her, there is another method that will allow you to have savings and feel the pleasure of hard work.
“Evaluate the cost of the desired item and allow yourself to buy it when the size of the financial cushion is twice the price of the product. The primary financial goal should always be to create savings, and then prioritize all necessary and desired purchases,” the consultant added.
In her opinion, the most obvious method to achieve financial goals is to put aside an amount of 10% from each income.
“Please note that this should be a comfortable process for you – freezing this amount of money should not affect your standard of living in any way. If you have to limit yourself in necessary expenses – reduce the percentage of savings. However, the temptation to spend only the funds received is always great – you may even doubt whether you need to put money in the piggy bank this month or whether it is better to buy yourself something new,” the specialist explained.
Therefore, automatic replenishment of the savings account is a convenient tool that combats the human factor, she said.
“You will still be able to treat yourself to the purchase you want, but you will be assessing your budget without the automatically set aside amount of money. This will help you to be more rational about the distribution of money, and will also increase the chances of creating a good financial safety net,” she concluded.
Earlier, analysts interviewed by RT named the necessary size of the financial cushion.
Source: russian.rt.com
