What I Save in a Month as a 31 year of living in Romania

Last time I talked about what I spent in a month, but I would also like to talk about the other flip of the coin, and that is what I save. 

I was never great with money and my spending habits sometimes impacted my budget, therefore I invested a lot of time in learning about financial education and doing my best to save. Here is how I budget my income and what types of artifacts I am using for saving:

1. I always pay myself first

10 years ago I thought I would save some money when I would earn more. Or that I would save what is left in my account at the end of the month. After a couple of years I would still have less than 200 euro savings. 

Today, in the very same day when I receive my paycheck I split the money into 3 categories:

1. Debt that I have to repay monthly - the loan than I have on my apartment 

2. Utilities and other recurring payments - water, gas, phone, parking, etc.

3. Savings 

4. Monthly spending budget 

2. Create a savings goal per month

When starting to budget, I always have a clear goal of what I would like to achieve, from paying my loan in advance, to having an emergency found, to travel savings, I know what amount I have to set aside to achieve it.

Sometimes it can be hard to stay focused when you know you have to wait for a long period to achieve your goal. Therefore, I like to visualize what I accomplished each month by looking over the “books”.

3. Multiple savings accounts

Since I am paying already at 2 different retirement funds directly from my salary taken by my employer, for now I decided that I will only add a small amount each month to a safety retirement fund. Here I also add all the rounds up for my transactions, give or take 50 euro/month.

For traveling, I have a different savings account where I add 200 euro each month, this money comes from an apartment that I rent (150 euro) and another 50 euro that comes from my salary. Apart from it, I also add all the money that I earn from my freelance job. Is not much, but I know that at the end of the year, I can budget most of my trips from this money. 

My emergency fund is in a safety deposit that I cannot break unless absolutely necessary, otherwise I will lose the interest rate. I decided that 3000 euro is the emergency amount that will allow me to go by for around 3-4 months with minimum spending.

My default saving account is where I add all the extra money that I want to pay in advance at my loan. Here I like to gather around 2000 euro and then I go to the bank and reimburse it. Per month I add around 1000 euro to this account, more or less depending on the expenses that I have coming.

Apart from all of those, I have a second debit card, Revolut, where I have 2 vaults, one for 200 euro for small emergencies and the second one where I round up all my transactions. 

4. Stock investments 

This one is pretty new, since it was in 2020 that Revolut decided to give it’s clients the opportunity to buy stocks directly from their app. I consider the money that I add here as lost and I try to see it as a way of gaining experience, until now I have around 350 euro worth of stocks and I only add around 50 euro per month. In this case, I know that the risk of losing this money is high, so I do not count on it. Perhaps in the future I will consider opening an account in a professional app and take the stock investments seriously.

5. Cash money

I know that in modern times the need for cash money is not that high, but I do keep a small amount just to be sure I have it in case I need it right away. Here I like to add off the rest from 1 euro to a wallet and at the end of each month exchange it to bigger bills. In 2 years I have around 400 euro in cash from doing this. Apart from this, I also have the money left from my traveling, usually in euros or dollars, I keep this for the next travel destination and always try to round up the amounts.

To round everything up, per month I have the following savings scheduled:

• 200 euro for traveling 

• 1000 euro saving for my credit reimbursement 

• 50 euro for my extra retirement fund

• 50 euro for buying stocks 

• 50 euro for the roundup from my 2 debit cards and for my cash wallet 

Total: 1350 euro

Saving is not something fun, but I know that I need to do this if I want to afford a decent living and diminish the amount of interest rate fees from the bank. My overall plan is to finish paying for my apartment and buying a new one with 3 bedrooms (the current one has only one bedroom). Also, I would like to be able to buy myself a new car in the upcoming years since my old car breaks way too often and the maintenance is getting too expensive.

Even with the best laid down plan, I still have months when my spending habits get the best of me, or when there are little emergencies that I need to cover, therefore I am not able to stick to the initial plan. I’ve learned that I need to kind with myself if I want this to work and also, that I need to leave enough money for me to afford a decent lifestyle. It took me almost 10 years of employment to stabilize my saving habits.