The Secret to Building Savings Fast: Practical Tips That Are Proven to Work!

VIVA – Many people in Indonesia, especially the younger generation, have difficulty saving despite having a stable income. The reason for this is the lifestyle of consumers, lack of financial planning and lack of awareness of the importance of saving.

Many people find it difficult to save because they spend their monthly money on daily necessities and a lavish lifestyle. At the end of the month, they are often confused about where their money goes, making it difficult to make future financial plans.

The solution to this problem lies in learning the right financial management strategy and being disciplined in saving. Various saving methods and expert financial management can help you accumulate savings quickly. Below are challenges, savings strategies and practical tips to build savings quickly.

Savings problems in the modern era.

Many young people in Indonesia are focusing more on a luxurious lifestyle that is often beyond their means. As a result, personal finances get out of control and saving becomes a big challenge. According to information from the Office of Financial Services (OJK) and financial media of the Ministry of Finance of the Republic of Indonesia.

According to the financial media of the Ministry of Finance, the rising cost of living, especially in cities, causes more income to be spent on basic needs.

• Lack of financial awareness

Savings are often considered the last priority, although with the right strategy, savings can accumulate faster.

Effective savings strategy

1. The 50/30/20 method

If your income is limited, you can use a simpler method like 50/30/20. This principle allocates 50% to basic needs, 30% to necessities, and 20% to savings and investments. With consistency, this method can structurally save more. Source: Warren and Tyagi in All Your Values.

2. Kakeibo method from Japan

This method teaches you to record all income and expenses and to concentrate savings at the beginning of the month. Discipline in recording and evaluating expenses can facilitate the savings process. Source: Fumiko Chiba, Kakeibo: The Art of Saving Money. If your goal is to save in the long term, then techniques like Kakeibo that focus on controlling day-to-day spending can be very effective.

3. 70-10-10-10 Budget like Jim Ron

If your income is higher, you can try the 70/10/10/10 or Kakeibo method. Set aside 70% of your income for daily needs, 10% for savings, 10% for investments, and 10% for charity and social work. This method also emphasizes the importance of investing for the future. Source: Jim Rohn. If your goal is to invest and grow, the 70/10/10/10 method of allocating money to invest may be more appropriate.

It is not necessary to use all saving methods at once. The primary key is peffective savings strategy is find the best method according to our personal financial circumstances and lifestyle. because everyone has different financial needs and goalsIt is important to choose a rescue method that is appropriate and effective for your situation.

You don’t have to use just one method. Some people may be better suited to a combination of methods. For example, you can use the 50/30/20 principle for daily needs and savings allocation, but add elements of the Kakeibo method to be more disciplined in recording expenses and managing spending categories.

Practical tips to build up savings quickly

1. Mark the small expenses

Quoted from the Ministry of Finance’s financial media page, Avoid neglecting small expenses like coffee or snacks, as they can add up to a large financial burden.

2. Buy based on your needs, not your reputation

According to the Financial Services Bureau (FSB), avoiding the purchase of luxury items for the sake of prestige is one of the most effective ways to accelerate the growth of savings.

3. Depositing at the beginning of the month must be disciplined.

Do not save the remaining money at the end of the month, but set aside a certain amount of money immediately after receiving your salary, which can be found on the Ministry of Finance website.

4. Use a special savings account

According to the Financial Services Bureau (OJK), separate savings accounts from daily accounts to avoid the temptation to withdraw deposited money.

Conclusion

Saving methods should be tailored to your financial situation and personal goals. You don’t need to follow all of the methods, just choose one or more suitable methods and practice them consistently.