Savings are your safety net for unexpected situations and your pathway to achieving important life goals.
Having financial reserves is especially important for migrants because:
• Employment may be seasonal or unstable;
• There could be unexpected expenses related to paperwork;
• You may need to financially support your family back home;
• It's essential to have capital for returning home and starting your own business.
We continue our series of financial literacy articles for migrants with support from our trusted partner, Migrant.uz. Let's explore the basic principles of saving money:
The Two-Envelope System:
• Separate money into spending and savings;
• Keep your savings apart from daily expenses;
• Don't mix different financial categories.
The Fixed Amount Method:
• Decide on a specific monthly saving amount;
• Treat savings like a mandatory payment;
• Increase the amount as your income grows.
The First-Day Rule:
• Set aside money immediately upon receiving your salary or income;
• Begin by saving 10% of your income;
• Gradually increase the percentage you save.
Small Change Savings:
• Put all small change into a savings jar;
• Save bills of specific denominations;
• Regularly deposit small sums into a savings account.
Goal-Oriented Savings:
• Define a specific financial goal or several goals (for example, buying a flight ticket, car, etc.);
• Calculate the amount needed;
• Determine the timeframe for reaching your goal;
• Divide the total amount by the number of months.
Automated Savings:
• Set up automatic transfers to your savings account through your bank app on payday or income days;
• Use savings accounts ("envelopes" or "pockets") within banking applications;
• Activate rounding-up purchases, transferring the difference into savings.
Where Is the Best Place to Keep Your Savings?
💳 Banking Tools:
• A savings account with a reliable bank or banking app;
• Deposits with the possibility to add funds;
• Accounts in different currencies to diversify your savings—if the ruble weakens, foreign currency savings maintain their purchasing power;
• Metal accounts (gold, silver).
💵 Cash Savings:
• Keep them in a secure place (home safes or bank safety deposit boxes) and in multiple currencies;
• Divide savings into several portions;
• Be mindful of inflation risk.
Typical Savings Mistakes:
🚨 Lack of a Clear Plan:
• Undefined specific goals;
• No regular savings system;
• Making spontaneous saving decisions.
🚨 Keeping All Money in One Place:
• Risk of losing all your funds;
• Temptation to spend your savings;
• Difficulty managing multiple saving goals.
🚨 Saving "Whatever's Left":
• Usually, nothing remains;
• Savings are not prioritized;
• Lack of discipline.
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In the next article, we'll reveal secrets for becoming debt-free.
