How do you feel about saving money

How best to save money? Three strategies and tips for saving

Ralf Kretzschmar, December 4th, 2020

Saving money - for many this is just a good resolution. But how do you really manage to save money without restricting your own lifestyle too much? More important than the countless little tips on saving is being aware of money.

Here you can find out how you can manage money more carefully, step by step, and which specific tricks you can use to save at home, in the car and in the supermarket. Saving will only be really interesting for you if you invest the money you have saved and let it work for you.

Strategies for a conscious use of money

If you want to start saving money, then step by step you should find a way to be conscious of your finances. Below you will find strategies and tips on how to do this.

1 | Avoid impulse purchases

Everyone knows a spontaneous purchase: You leave the house to buy new pants, but can't find any pants and buy the tenth jacket - the budget was already planned in any case. In the long run, such spontaneous purchases have a hard impact. There are several strategies to avoid impulse purchases.

One strategy is that 30 day rulewhich applies to major purchases. First put them on a waiting list for 30 days. If the wish is still great enough after a month, these can also be bought. After the one-month waiting period, it often turns out that the purchase was not as important as initially assumed.

It works on the same principle, only for smaller purchases 10 minute rule. If you spontaneously find an object or a piece of clothing in a shop, carry it around with you for 10 minutes until the allure of the new has subsided. A purchase can appear significantly less attractive after such a short time.

Tip: It is also a good idea to consult with a good friend. With this little trick you can effectively avoid spontaneous expenses.

You can also avoid impulse purchases with these three other tricks:

  • For example, when you run an errand, make yourself aware that how much working time this purchase will cost you. To do this, compare the price of the item with your hourly wage. The value of the object then usually appears in a different light.
  • Another tip to prevent impulse purchases is to leave the EC card at home and only leave the house with a certain amount of cash.
  • It is also a good idea to always head for the same supermarkets and clothing stores. So you are familiar with the offer, can assess savings campaigns well and are less likely to be seduced by new products.

The result of these strategies is that you just don't buy the really important things and save money, but also happier with the purchase and save yourself the hassle of unnecessary purchases.

2 | Planning is half the battle

Instead of spontaneously buying things that you don't even need, you should rely on solid planning. It can start on a small scale, such as with a shopping list for the next errands in the supermarket. A little more planning already requires one weekly menu and shopping plan. This not only avoids spontaneous purchases with a growling stomach, you also eat more consciously and throw away less food. Another advantage: you need to shop a lot less than before. So you not only save money, but also time - and time is known to be money!

Making plans and making resolutions brings a lot of good feelings with it

Friedrich Nietzsche

To save a lot of money, you should act with foresight. A popular mistake is to only save what is left at the end of the month. Usually, however, there is very little or nothing left at the end of the month, so that no savings are made. Instead, put right at the beginning of the month about 5% to 20% of your salary back. This works best if you define a fixed savings goal and one Savings plan to lock.

With a savings plan, you regularly pay smaller amounts of money into a separate account. The money is automatically withdrawn from your checking account. Depending on your requirements, you can choose between a low-risk bank savings plan or high-yield equity, fund and ETF savings plans. You can invest in real estate using a real estate savings plan.

If you want to have a more comprehensive overview of your finances, it is worth keeping a budget book. That sounds a bit old-fashioned and boring, but it allows you to keep track of your income and expenses. In this way, you can easily identify unnecessary costs in retrospect.

tip: Instead of a classic budget book, you can also use apps such as Finanzblick, Monefy or Money Manager, which can also be used on the go. Or you can spontaneously write down the expenses on your mobile phone and later collect them in a table.

3 | Stay optimistic!

No spontaneous purchases, but reflection and planning: As you can imagine, saving money can be a chore, especially at the beginning. Do not restrict your freedoms too much and do not lose sight of your quality of life. Instead, look to the future with optimism and motivate yourself with the goal that you are saving for, such as a big purchase like a car or the future education of your children.

The best savings tips for everyday life

1 | Saving in the household

With long-term planning, a budget can show unnecessary costs. Otherwise, one thing above all is worthwhile in the case of large costs: to compare. Be it for electricity, gas, internet, account management fees, mobile phone contracts, subscriptions or insurance - there is often a savings potential of over € 1,000 per year. Comparison portals such as Check24 and Verivox are useful here. It is not uncommon for you to find that the new, cheaper provider is even more sustainable than your previous one.

There is further potential for savings if you muck out and find superfluous or duplicate things, for example on Ebay or Kalaydo. Things for your own apartment or wardrobe don't necessarily have to be bought new either. Browsing at a nearby flea market takes a little more time, but the finds are much cheaper and often have a charm of their own that cannot be found in any department store.

In the long run, evenings in restaurants or bars can consume a lot of money. The obvious alternative here is to spend the evening with yourself, with friends or outdoors in summer.

A final, diverse savings option in everyday life is called: “Share instead of buy”. In the sense of the Sharing economy you can get a wide variety of goods inexpensively. Groceries from food sharing or holiday apartments via AirBnB are good examples of this. Tools such as drills or books as well as children's toys can of course also be easily shared with neighbors or friends. There are also alternatives to investing in a car: Form car pools, use sharing providers or car pool agencies.

2 | Tips on how you can save on your car

If you own a car, it is also worth making a comparison here. This not only applies to the purchase, but also to the Refuelingwhere you can use comparison apps such as the TankenApp or Mehr-Tanken. In general, it is advisable to refuel in the early evening, as this is when the average prices are lowest. On the other hand, refueling is most expensive at the weekend or before the start of the holiday. If you want to keep ongoing consumption costs down, consider the Tire pressure and the air filter check the car regularly.

If you live in a big city, you can consider leaving your car behind more often and switching to a bicycle or public transport. If you are dependent on the car, it is worthwhile to avoid single journeys and to combine several appointments.

3 | Save when shopping in the supermarket

As already described, you can avoid costly spontaneous purchases with a shopping list. You can also save a lot of money with the following five tips when shopping in the supermarket:

  • Don't go shopping when you are hungry. Otherwise you are more likely to buy things for your current appetite that you do not necessarily need.
  • Buy long-lasting products such as rice, pasta or olive oil in large packs or bottles. So you not only save on shopping, but always have the most important basic ingredients for cooking at home.
  • Grab the House brands in the supermarket instead of expensive branded products and compare the different kilo prices. It is also always worth looking up or down, as the most expensive products are usually in the customer's field of vision.
  • Eat seasonal, because when the respective fruits are in season, they are usually much cheaper. A seasonal calendar helps you to keep track of which fruits and vegetables are just ripe throughout the year. A positive side effect: your food is much more ecological and protects the climate.
  • You can also find cheap groceries in the supermarket, at the bakery or at the weekly market go shopping just before the end of the day. Since products are no longer sold there the next day, you can often save up to 50%.

Invest the money you have saved

You should not just let the money you save lie on the high edge, because it is gradually losing value due to the current inflation. To compensate for losses in value due to inflation, you should invest your saved money or invest it against interest.

Due to the zero interest rate policy of the ECB, you currently only receive very low interest on classic savings investments (savings book, overnight or fixed deposit). If you still rely on these safe investments, you will not be able to increase your money due to the inflation rate. In 2018, for example, there was only 0.18% interest on a call money account, whereas the inflation rate over the year averaged 1.92%.

You get higher returns on the stock exchange than on classic banking products, i.e. when you invest in stocks, bonds and equity funds. Equity funds are more popular with private investors than a single investment in stocks, as experienced portfolio managers invest in various securities - although management fees are often very high. ETFs such as the MSCI World ETF, which are passively managed and replicate a stock index, advertise at significantly lower costs.

If the stock market seems too risky for you, real estate investments offer an alternative asset class. Real estate funds are a popular, diversified investment product. A new way are also digital real estate investmentsas offered via the BERGFÜRST platform. Here private investors can invest in large real estate projects from € 10. BERGFÜRST provides you with investment opportunities with short terms of one to five years and with fixed interest rates of 5.0% to 7.0% p.a.

You can of course continue to save the income from the money you have invested - or you can reward yourself once: for example with a trip, a nice concert or an expensive dinner for two. After all, investing in your own well-being is never wrong.

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