Tashkent, Uzbekistan (UzDaily.com) — Everyone dreams of living comfortably, with enough money to meet their needs, but not everyone knows how to achieve this. Savings can help with this. Experts from Alpari explain various ways to build savings.

Income levels are undoubtedly important. However, high earnings do not guarantee financial stability. Crises, poor investments, massive debts, and the inability to live within one’s means can undermine any financial situation. Remember, Michael Jackson and Mike Tyson were both deeply in debt, and so were Walt Disney and Mark Twain.

Such situations could have been avoided if they had had a financial safety net.

The good news is that you can build savings with almost any level of income. These reserves will help you weather difficult times and save up for your dreams.

There are specific techniques for forming savings. Here are some of the most popular ones:

The 10% Rule

Save 10% of any income.

It doesn’t matter if it’s your salary, a bonus, or a birthday gift. A tenth of your income is a small amount that won’t affect your financial well-being, but the habit of saving will gradually form. Additionally, within six months, you’ll have a nice supplement for a vacation, and within a year, you’ll essentially have a 13th salary that you’ve organized for yourself.

The Six Envelopes Rule (or Six Jars Rule)

This method is described in Harv Eker’s book "Think Like a Millionaire."

The concept is very simple. After receiving your salary, allocate the entire income into six envelopes. Each envelope is designated for a specific purpose, and the money from each can only be spent on that purpose.

The money in the envelopes is allocated as follows:

1. 55% of income: for monthly expenses (food, transportation, utilities, household needs).

2. 10%: for entertainment and leisure (cafes, movies, theater, etc.).

3. 10%: for investments aimed at creating passive income.

4. 10%: for education, courses, training, workshops for yourself and children.

5. 10%: for financial safety net and savings for large purchases, such as a new computer, car, or vacation.

6. 5%: for gifts and charity.

The 60-20-20 Rule

This method is similar to the previous one, but the money is distributed differently.

60% of the income is saved for necessary expenses, 20% for personal desires, and 20% for savings.

Rounding Up

Another useful technique for saving money involves rounding down the balance on your card to the nearest whole number and transferring the difference to a savings account.

For example, if you have 28,673 som left on your card at the end of the day, transfer 8,673 som to savings. If you use cash, get into the habit of putting accumulated small change into a piggy bank every evening, and after some time, open a deposit or purchase foreign currency.

Automatic Transfers

Set up a monthly automatic transfer of a certain amount from your checking account to a savings account. If your income increases, you can adjust the transfer amount accordingly.

30-Day Saving Rule

When you feel the urge to make an impulsive purchase, wait 30 days to give yourself time to think about whether you really need the item.

In the meantime, deposit that money into a piggy bank or savings account. If after a month you still decide to make the purchase, go ahead; otherwise, the money remains with you, turning into savings.

Common Mistakes in Building a Savings Habit

To develop a saving habit correctly, avoid common mistakes.

Here are the most common ones:

- Thinking that saving is “difficult,” “boring,” or “unpleasant.”

As is well-known, thoughts are material. If you start out with a negative attitude, feeling that saving is a struggle, it will not end well.

Avoid this trap! Save with pleasure, using the sound financial techniques mentioned above.

- Depriving yourself of everything.

There is a belief that someone who is saving money should live in maximum austerity. This is a dangerous misconception. Acting this way will soon lead to depression, and the joy from future goals—even if it’s a long-awaited vacation, a car, or an apartment—will not outweigh the negativity in the present. This will either lead to a breakdown and abandonment of saving or to illness.

- Lack of consistency.

If you diligently saved money for several months and then decided to break the financial discipline “just this once,” be sure that this precedent will soon lead to another, and then another, until the saving habit disappears.

Consistency in important actions is a key component of success. This rule also applies to finances.

- Dipping into your savings.

You saved diligently, but then saw a new phone and found yourself reaching for your savings.

Choosing emotions over reason is a common issue. This problem is prevalent in any consumer society. Marketing departments work hard to get people to make spontaneous purchases and buy things they don’t really need. Don’t let corporations control your life. You have your own financial goals and desires—pursue them and don’t spend your money on things you don’t need.

Don’t Skimp on Yourself!

There are areas where you shouldn’t cut corners. This includes expenses for medicine if you’re sick and overall medical care.

Investing in your health is essential, and it’s better to do this proactively, for preventive purposes. This means not only going to the gym and avoiding bad habits but also ensuring a proper vacation, a balanced diet, and so on.

Don’t skimp on education if it will help you earn more in the future.

Alpari experts