How to develop a savings habit

This podcast is voiced with the help of Artificial Intelligence tools.

Creating the habit of saving as part of our daily routine can be simple when we focus on making small, consistent changes. Sometimes, the idea of saving brings to mind setting aside large sums of money into a specific account. However, it’s often more effective to adopt simpler habits that help us achieve our goals almost effortlessly. Moreover, with the help of technology, we can now make these changes more easily and effectively.

A useful tool for saving is BBVA's rounding system. How does it work? It's simple: every time you make a purchase with your debit card, the amount is rounded up to the next euro, and the difference is automatically transferred to a separate savings account. This is an easy and practical way to accumulate small amounts of money that can help you reach your financial goals.

Pongamos un ejemplo: for example, if you buy something for €13.45, the amount will be rounded up to €14, with the additional 55 cents going directly into your savings. This method allows you to save small amounts without even noticing. You can also choose where to allocate this money, such as the BBVA Goals Savings Account: an account which has no administration or maintenance fees and offers greater control over your savings.

Rounding up gives you flexibility and control over your savings. And not only that, but it’s a useful mechanism that puts your money to work for you, so you don’t have to stress over managing your budget every month. Plus, it’s a habit that helps you achieve your long-term goals.

Another effective strategy for achieving substantial savings is the 'Greene formula,' which helps you establish a savings plan throughout your working life. This formula relies on two variables: your gross annual salary and your age. According to Greene, for every five years you work, you should save the equivalent of one year's gross salary. So, for example, if you earn €20,000 a year, you should aim to save €4,000 annually, which breaks down to about €333 per month.

The 'Greene formula' method provides a convenient way to plan your savings. This approach allows your savings to grow with your age, adapting to your changing economic and work situations. The primary goal of this formula is to ensure you have a stable financial future.

Both rounding and the 'Greene formula' are excellent tools for managing your finances. Rounding helps you save gradually and automatically, while the 'Greene formula' offers a flexible framework for planning your savings throughout your life, tailored to your personal circumstances.

Another innovative way to save is BBVA's Piggy Banks. This feature in the BBVA app allows you to set aside a specified amount of money from your account easily. With Piggy Banks, you can not only save to reach your financial goals but also control your spending or simply accumulate funds. Adding or withdrawing any amount is just a click away, making it easy to manage the flow of money between your main account and your Piggy Banks. Piggy banks work like a withholding, meaning they are not shown in the available balance.

Creating a piggy bank in your BBVA app is just as easy as using it. The process is straightforward: you simply need to name it for easy recognition, select the bank account it will be linked to, and specify the amount of money you want to transfer monthly. You can adjust this amount at any time. Once created, you will see your new piggy bank with the chosen name, the associated account, the accumulated amount, the operations you can perform, and a list of all transactions.

All these plans not only help you manage your money better, but also allow you to lay the groundwork for developing a savings habit whenever you're ready. While it's true that there are many ways to save, having a well-structured financial plan is crucial for defining your goals and staying on track over time. Your goals don’t need to be grand; what matters is that you grow progressively. This approach inspires us to keep moving forward.

If you want to learn more simple steps to help you save and plan your financial situation, the BBVA app offers a “Financial Health” feature. This feature provides access to a wealth of information that can help you better manage your money and achieve your goals.