Common mistakes in saving that make you never have a penny left

Spending management is not too focused on calculation.

In fact, there are many spending management methods that you can refer to such as 50/30/20, 6 jars, keeping records (in books or Excel files) or using spending tracking software. However, through the process of consulting many customers as well as interacting with young people, Mr. Ta Thanh Tung - Personal financial planning expert at FIDT Investment Consulting and Asset Management JSC - often receives the answer that they still do not manage their spending effectively. Many people still overspend or cannot save the amount of money as planned, despite recording their spending in great detail and completely.

Mr. Tung emphasized that spending management is more a matter of behavioral psychology than of calculation techniques. Therefore, each person needs a psychological support tool as follows:

The amount you want to save each month should be set aside first, right after receiving your income, to ensure you save as planned and not spend this money on inappropriate purposes.

Next, you should budget for entertainment purposes. To limit yourself to spending only within this amount, it is best to separate this amount into a separate account so that every time you look at this account, you will know how much you have spent and how much is left for luxury needs.

Finally, the rest we will calculate the fixed costs, estimate the grocery money as well as the miscellaneous expenses and package them in the account for the essential goal.

"You can easily see that the foundation of this method is the 50/30/20 budgeting principle - corresponding to essential/enjoyment/savings. However, these ratios will be in the direction that if your income is higher, you need to increase your savings ratio. By dividing 3 separate accounts like this with regular monthly deductions, you don't need to pay too much attention to recording each expense in detail" - the expert shared.

Can you save money if your income is too low?

According to Mr. Ta Thanh Tung, reality proves that by cutting off the amount of money for the savings goal from the beginning of the month and being determined not to touch this amount, for the remaining expenses, you will activate the "trade-off" mechanism every time you are faced with a spending decision (look at the remaining amount to know how much you can spend). Therefore, you will easily complete the savings goal, specifically wrapping up spending in the remaining amount after saving.

In case we cannot save enough income for our savings goal despite our best efforts, Mr. Tung believes that this is the time when you must find a way to increase your income, or choose an area/location to live with lower costs.

The Smart Finance program is jointly produced by Lao Dong Newspaper and FIDT Joint Stock Company - Investment and Asset Management. The video series is broadcast at 7:00 p.m. every Thursday with the participation of leading prestigious financial experts sharing knowledge and skills in personal financial management and investment with readers/viewers!

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