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The One Cup a Day Rule: How to Start Saving Money for Investments
01.03.2024 13:10
Most modern people know that investing is the key to a secure and stable future.
Despite this, almost everyone puts off this issue for later, saying that their income does not allow them to invest. According to psychologists, this is a subconscious trap.
According to financiers, anyone can start saving money for future investments, regardless of their income level.
The one cup of coffee a day rule
Almost every second person likes to drink coffee in the morning, during lunch break, for dinner, when hanging out with friends.
When drinking a favorite drink, no one thinks about the fact that each cup costs money, even small ones. To identify the amount of expenses, experts conducted research.
In Moscow, on average, 1 cup costs 3 dollars. For 22 working days, the average working resident spends 66 dollars ($800 per year). It follows that if you do not drink coffee for at least a year, then everyone will have money for investment. Over 10, 20, 30 years, the amount will increase. This will allow you to receive additional income in addition to your pension.
This method does not mean that you need to give up your favorite drink. It shows that you can start investing with a small amount. And an increase in income will allow you to save more and achieve financial independence in 7-10 years.
Other ways to save money
Piggy bank for 365 days
To save, you need to start with 1 ruble. According to the method, on the first day you put aside 1 ruble, on the second day 2 rubles (1+2), on the third day 3 rubles (3+3), etc.
If you save up at the end of the year the amount will be 66,795 rubles. You can make notes in a notebook to control it. You can save more, but definitely not less.
It is recommended to invest the accumulated amount or spend it on vacation, repairs, etc. You can save it in cash or in online wallets.
Six jugs
The idea of the method is to distribute the income received among 6 jugs. In each of them, you need to put aside a certain amount for individual purposes. Moreover, the money in the envelopes (jugs) must be spent on previously selected purposes.
Jar #1 is used to save money for everyday expenses (55%). In the 2nd, you need to save for entertainment and recreation (10%), for example, shopping, cafes, theater, exhibitions, etc.
In the third, you need to save for investment (10%). Jar #4 is used to save for self-development, education, training fees, online courses (10%). In the fifth envelope, you need to save to create a financial cushion or make a large purchase (10%). The last one is needed to save for gifts to friends or charity (5%).
Challenges
Sometimes it can be boring to save according to a pre-set schedule. In this case, you can organize challenges. Their purpose is to temporarily reduce expenses and use the saved money for investment.
For example:
- giving up sweets;
- refusal of alcoholic beverages;
- save on transport;
- take the bus instead of a taxi;
- take food (lunch) with you to work.
The idea is to save the money you save. The main thing is that challenges should be short and one-time.
Previously, we listed 5 life hacks on how to use hopelessly outdated things in everyday life.
