Smart money management or how to save without limitations

I'm often asked: where to start if you want to understand your finances and learn not only how to spend but also how to save? The answer is simple: it all starts with the mindset. Financial literacy is not just about numbers, it's about habits and the right approach to money.

I sincerely believe that saving is not a limitation but a way to take care of yourself in the future. That's why I want to share practical tips that will help you learn how to plan your expenses, build savings without stress, and even make this process fun.

So, let's get to the bottom of how to change your mindset so that money becomes your ally.

How do you start managing money wisely?

First of all, it is important to understand that saving is shrinking and development is expanding. So first, we need to change our mindset because it is the mindset that is responsible for money.

How do you start managing your income properly? You should sit down and simply write down your expenses. They can be constant or variable. And you need to learn how to manage your finances in order to cover these fixed costs easily and without discomfort. In addition, this category should always include the point "savings". This is the only way to save money wisely, knowing that savings are permanent, not volatile, finances.

It's all worth getting into the habit of doing because, in reality, it's like brushing your teeth in the morning. For example, I have three children, and my eldest son already knows that he brushes his teeth in the morning and evening. The younger ones may still forget because they have not yet developed this habit. It's the same with income. We need to agree with ourselves and develop the habit that saving is, so to speak, a routine.

How do you plan savings without limitations?

In order not to perceive them as a strict limitation, you need to understand that you are doing all this exclusively for yourself. Make a game of it: add the point "for yourself" to the list of expenses and pay yourself first, not someone else. It will be considered to be your savings.

You can also try a gamification format: make interest on cards or interest when funds are returned when transferred to a bank. By the way, when money comes in and automatically goes to the bank, many people perceive it as if they have less money. But if you set up a system where you pay a certain percentage of the amount you spend, for example, on coffee, it can be an interesting approach. Imagine paying for coffee to the owner of a coffee shop and at the same time paying for yourself. Here, you can experiment to find a comfortable option. And at some point, you will realise: "Wow, it's cool! Every time I pay someone, I don't forget about myself."

Why should you plan your savings first rather than saving your balances?

Our brains are wired in such a way that we don't put savings on the list of fixed expenses. And, as a rule, we don't have any money left over. We live in a world of marketing, where we are constantly offered to buy something. So we already know that no matter how much money we are given, we will easily spend it. That's why, as soon as you receive money, you need to divide it up, including your savings.

How do you make money to work for you?

You need to start learning about investing because money that is just sitting in an account is not an investment.

I recently spoke to teenagers who are 15 years old, and even they have their first pocket money. Perhaps some of them already have a job somewhere, so they can invest with at least UAH 500 (USD 12.06 — Ed.). To do this, you need to sit down and study cryptocurrencies and stock markets.

But even here, there can be a trap. You need to clearly understand what an investment is. It means that you are investing money now in order to receive dividends in the future — money from the money you have already invested. That's why, for example, if people buy various courses and training but don't take them and don't use this knowledge in their lives, it's a waste, not an investment. I need to set myself a goal: I start earning more after each training I take.

Why is financial literacy more important than income?

Financial literacy is the basis on which income is built. People who can earn good money but do not have financial literacy are still in the red. And those who know financial literacy but, for example, do not have a very high level of income can still be in the black because they know how to save, invest, and grow their money in an environmentally friendly way.