Smart Ways to Save Money: Tips and Tricks

Saving money remains a crucial topic all the time. Even financially savvy people constantly think about it. Awareness and a willingness to navigate complex financial concepts are the keys to preserving and growing your savings.

During crisis times, cash naturally becomes the primary means of payment. However, it's important to remember that inflation steadily erodes its value. Instead of watching your cash turn into worthless paper, equip yourself with diverse financial tools to protect and grow your reserves.

Let’s find out how to save money by looking through the multiple working methods and finding the best one for you.

How to Protect Your Money from Rising Inflation

Both consumers and businesses must follow a simple rule: profits should fully outpace inflation. Only then can you stay ahead financially. Let’s explore the best ways to save your money from inflation.

Cutting costs during a crisis is essential for entrepreneurs. However, maintaining high-quality business processes is just as crucial. Striking the right balance requires caution and strategic planning.

For example, transitioning part of your staff to remote work can significantly cut office expenses – reducing space leads to lower rental costs. Analyzing tax structures to minimize tax burdens and exploring other optimization strategies can also be beneficial. It’s worth researching what government incentives are available for businesses and whether yours qualifies for any special benefits.

A tip from iconic investor Warren Buffett is to manage companies that don’t need constant reinvestment. He believes that during economic downturns, these businesses have the highest growth potential since they continue generating income without the need for ongoing investments.

Inflation is an inevitable part of any economy, but sharp price surges can negatively impact everyone. The key to preserving wealth lies in owning steadily appreciating assets, cutting expenses to boost profits, or – ideally – finding the right balance between both strategies.

How to Store Your Savings to Protect Your Money

How much do people really have, how did they accumulate it, and what do they do to keep it safe? A survey by the Romir research group sheds light on saving habits and strategies:

• 52% of respondents spend their entire income without setting anything aside – showing that most people struggle with saving
• The remaining 48% have different approaches: 31% prefer keeping their money in a bank deposit, and 30% just hold cash

So, it’s clear that when it comes to savings, many people tend to be quite conservative. However, deposits, stocks, bonds, and other financial assets are becoming more popular.

Let’s explore the potential reasons why people continue to rely on conservative approaches to saving money:

• A lack of trust in the banking system due to financial crises
• Low financial literacy makes it difficult for people to invest and grow their capital
• Many live in remote areas where accessing a bank branch is a challenge
• Some simply prefer the tangible feel of cash, enjoying the security of holding and counting physical banknotes

While these habits persist, exploring alternative savings strategies could open new financial opportunities.

Some believe that keeping cash at home ‘tucked under a pillow’ is the safest way to preserve money. Unfortunately, that’s a myth. Inflation steadily erodes the cash value.

Imagine having 10$. Six months ago, that amount might have bought a meal at your favorite restaurant. Today, due to rising prices, it would cover nearly a third less.

The conclusion is clear: storing cash at home isn’t saving – it’s losing money.

Investment Rules: Smart Strategies for Financial Stability

Investing is one of the best ways to preserve and grow your money. However, to succeed – especially during a financial crisis – you need to follow some basic principles. Once you understand them, you can start looking for the right assets.

• Set clear goals and assess your risk tolerance before making any investments
• Stay calm – markets fluctuate, but panic rarely leads to good decisions. Stick to your strategy
• Diversify your investments. Spread your assets across different industries, countries, and currencies when possible
• Rebalance your portfolio when needed to maintain the right asset mix
• Consider professional advice. Experienced investors can help, and sometimes, exiting the market is the smartest move
• Invest wisely. Always understand how your chosen assets work before committing your money

By following these principles, you’ll be better equipped to navigate market shifts and make informed financial decisions.

10 Ways to Save and Grow Your Money

There are several effective strategies not just to preserve but also to increase your wealth. Let’s explore the most profitable options and how they work.

Open a Deposit Account

A deposit account is a reliable way to preserve money, even in crisis times. The best part? You don’t need any specialized economic knowledge. The income is guaranteed and insured, offering a safe and predictable way to grow your savings.

The first step is to familiarize yourself with the terms that different deposit accounts banks are offering and choose the most profitable option.

Deposit account advantages:

• Protection. Money in a deposit is safeguarded both by the bank and the government. The bank protects it from theft or fraud, while the government insures it against the financial institution's bankruptcy
• No temptation to spend. With your money locked in a deposit, there’s less temptation to make impulse purchases
• Protection against depreciation. The funds are protected from losing value due to inflation
• Guaranteed growth. Although the interest rate may be modest, your balance will still increase, ensuring steady growth

Deposit account disadvantages:

• Limit on coverage. The recommended deposit limits vary by country. If the bank goes bankrupt, the government will refund the insured amount, but anything beyond that is at risk
• Modest returns. Even with long-term investment, the returns on deposit accounts aren’t likely to be exceptionally high
• Early withdrawal penalties. Some deposit terms require you to forfeit interest if you withdraw funds before the agreed period ends

By choosing a deposit wisely, you’re ensuring a secure and controlled way to save money.

Let’s look through the key considerations when dealing with deposit accounts:

• Bank insurance. Ensure that the bank is a participant in the deposit insurance system, which guarantees your money is protected in case the bank faces financial trouble
• Deposit management. Understand how to add funds to the deposit and withdraw money. Some accounts may have restrictions or specific conditions for these actions
• Extension options. Check whether you can extend the deposit term and how to do it if you want to keep your funds invested for longer
• Interest calculation. Investigate how the bank calculates interest – whether it’s monthly, quarterly, or annually. Understanding this can help you better plan your savings strategy

Taking these factors into account will help you make an informed decision and maximize the benefits of your deposit.

Open a Savings Account

A savings account is another effective way to preserve money. Simply put, it’s a hybrid between a deposit and a checking account.

Let’s explore its key differences from a deposit:

• No fixed term. Unlike a deposit, a savings account has no set end date, giving you more flexibility
• Daily interest. Interest is accrued daily, so your money grows steadily without having to wait for a specific payout period
• Easy access. You can withdraw money from a savings account at any time without penalties

This makes it a great option if you want to earn interest without locking your money away.

Here are savings account features:

• No impact on interest after withdrawal. After withdrawing funds, your interest payments don’t decrease. However, some banks may inform you about possible changes to the interest rate
• Flexible deposits. There’s no obligation to top up the account regularly. The amount you deposit is entirely up to you. But there’s a limitation: the deposit cannot exceed 10 times the size of your first deposit
• Interest calculation. Interest is calculated based on the lowest balance within a specific period, so it's essential to manage the balance carefully to maximize earnings

These features make a savings account a flexible yet profitable option, provided you understand the bank's conditions and manage the account wisely.

Invest in Bonds

Bonds are debt securities. They’re used as a long-standing tool for saving money. They share similarities with financial deposits but typically offer much higher returns. Here's how they generate income:

• Coupon payments. When you buy a bond, you get regular coupon payments over a set period. At the end of the term, you earn a return, much like with a deposit account
• Capital gains. You can buy bonds at a low price and wait for their value to increase. Once the price rises, you can sell the bond for a profit. Bond prices are often influenced by changes in the central bank’s interest rates – when rates decrease, bond prices tend to go up, allowing you to sell at a higher price
• Government vs. Corporate Bonds. Federal bonds are considered more reliable, but they generally offer lower returns than corporate bonds. Corporate bonds may carry higher risk but also higher potential returns

Bonds can be a profitable way to save, especially for those looking for higher returns than traditional deposits while still maintaining a degree of security.

Buying Stocks

Stocks are typically chosen by those who aren’t afraid to take risks. When purchasing them, there is no guarantee of profit. There is a risk of losses if the stock price drops. However, if the stock price rises, a high return is assured.

The simplest ways to earn that every person should know about:

• Buying stocks, waiting for their price to rise, and reselling them. In this case, the profit is the difference between the amount spent and the revenue from the sale
• Buying dividend stocks, where owners get a share of the company's profits. Typically, dividends are paid once or twice a year

Buying Exchange-Traded Mutual Funds

Mutual investment funds are typically chosen by investors who can’t afford to buy a large number of individual stocks due to their high cost. One ETF unit contains a diversified portfolio of securities, which are purchased indirectly.

The mutual fund's purpose is to replicate the performance of a selected index or a curated basket of securities.

Most ETFs invest primarily in stocks. Some funds focus on specific regions, with US and European securities being particularly popular. Others target specific industries, like metals, oil, and gas.

ETFs are a solid option for passive investing. They can be bought and sold through brokerage platforms.

Real Estate Investment

Real estate is a traditional asset and remains highly popular among those who can afford a large investment. If you have a significant amount of money to buy an apartment – whether for personal living or as a long-term investment for your children's future – it’s certainly a worthwhile choice.

If you view real estate as a way to protect your money from inflation, it’s essential to think carefully before making a decision.

Not all real estate is liquid. Buying a three- or four-bedroom apartment on the small town outskirts is unlikely to yield high returns. Selling it may be difficult, and renting it out could also be a challenge. Plus, there are maintenance costs to consider.

The real estate market doesn’t always grow steadily. Property prices fluctuate – they can rise but also decline.

Investing during the construction phase is often more profitable. Prices are significantly lower before a building is completed, increasing the chances of earning a profit upon resale.

Choose properties in high-demand areas. For example, small apartments near universities can be easily rented by students or bought by parents for their children. Properties within walking distance of the subway also tend to attract buyers and tenants.

Investment in real estate isn’t limited to residential properties – it also includes land plots and commercial real estate. While it may seem that property prices always rise and any asset can be sold for a profit, this isn’t entirely true.

First, the real estate market doesn’t always move upward. Second, real estate requires continuous reinvestment – for maintenance, renovations, or taxes. In the long run, this can lead not only to minimal profits but also to financial losses.

Let’s look through the advantages and disadvantages of real estate investment.

Pros:

• You can invest a large sum right away
• Government incentives allow for partial tax refunds
• Renting out the property can provide a solid passive income

Cons:

• Requires a significant upfront investment, which few people can afford
• Maintenance costs can be substantial
• There is a risk of property damage or loss
• Many investments don’t pay off or generate only minimal returns that fail to outpace inflation

Investing in Precious Metals

Gold is the primary metal to consider, especially since its value tends to rise during political and economic crises. Since gold cannot be printed, it doesn’t depreciate. Experts strongly recommend investing in gold for the long term to wait out crises and secure a profit.

Another way to preserve wealth is to buy physical gold in the form of coins or bars. Gold coins are exempt from VAT, and discussions about removing taxes on gold bars are ongoing, but haven’t been implemented yet.

Gold is a dollar-denominated asset and typically rises in value during financial crises. However, there are exceptions. While the US dollar tends to strengthen during crises, other currencies may weaken, which can result in even higher returns on investments in those currencies.

One key advantage of physical gold is its accessibility—it remains available regardless of bank or stock exchange operations. However, owners must handle it with care to avoid scratches and contamination.

Currently, gold prices are at historic highs in the US dollar. If global stability improves, gold’s value may decline sharply, leading to investor losses.

Gold is often considered a safeguard against stock market crashes and inflation. However, investing in other precious metals, like silver, platinum, and palladium, can also help preserve wealth.

Many metal investors opt for futures contracts, opening brokerage accounts and choosing futures that best align with their investment strategies.

Investing in futures contracts is always risky. Investors aren’t protected from losses, but the returns from this type of investment are generally relatively high.

Opening an Unallocated Metal Account

It’s another conservative way to preserve wealth. It allows investors to hold precious metals like gold or silver without physically possessing them, offering a more secure and less volatile investment.

An unallocated metal account tracks the precious metals you’ve acquired. Generally, there are no costs for maintaining or opening this account, but when closing it, investors may incur fees. The amount that the investor receives is calculated by the financial institution based on the current market metal price.

Deposits and withdrawals can be made in either currency or precious metals. The bank buys or sells the metal in US dollars or any other currency, using the exchange rate on the transaction day.

Important: Unallocated metal account accounts aren’t insured, which makes them relatively risky. It’s recommended only to use trusted banks for these investments.

Buying Currency

To preserve wealth during crisis times, buying multiple currencies is an option. The US dollar and the euro are in the highest demand in the world. However, due to the current political situation, purchasing these currencies may be risky and unprofitable since foreign banks often charge high fees.

If the goal is to generate high returns, buying multiple currencies may not be the best choice. However, it can be a way to protect money if your country's currency depreciates. It's important to consider the risks related to the currency’s country since they can and will impact its value.

Starting a Business

Another option is to start your own business. The scale of the business will depend on your savings and your ability to handle debt. Money will be needed not only to launch the business but also to replenish working capital. While initial profits may not be expected, in the long run, a business could generate substantial income, possibly much more than other investment methods.

Alternative Ways to Save Money

It's worth considering less common but still effective preserving and growing wealth methods.

Building an Emergency Fund

An emergency fund is a sum of money set aside to help in critical situations. For example, during financial hardship periods, job loss, or asset loss, an emergency fund can help recover losses or provide income for a time without relying on a regular salary. Today, the relevance of this approach is exceptionally high.

The ideal size of an emergency fund is considered to be equal to or greater than three months' worth of standard expenses, including credit payments. If you already have an emergency fund but aren’t quite at this level, it’s a good idea to start saving more.

If your fund is small, now is the time to focus on increasing it. If it’s already around the desired amount, continue building it up. And if you don’t have an emergency fund at all, it’s time to start one.

The fund must be easily accessible. For storage, consider using savings accounts, bank cards that offer interest on balances, or short-term deposits. Avoid using securities since the market can drop unexpectedly.

Opening a Debit Card with Cashback

Many banks today offer debit cards with cashback. The financial institution partners with various stores, and when purchases are made, a certain percentage is returned to the card. Each bank determines the conditions under which bonuses are credited.

Let’s look through the debit card with cashback advantages and disadvantages.

Advantages:

• Funds are always accessible
• The card can be used worldwide
• The interest rate on balances is typically around 6-8%, offering some protection against inflation
• Funds on the card are insured

Disadvantages:

• The interest rate may decrease
• There may be additional fees for card maintenance and notifications
• Some banks set limits on cash withdrawals

Opening Accounts Overseas

An international account unlocks a world of exciting opportunities. For instance, it gives you access to trading on various global exchanges.

Important: when opening an international account, it’s essential to inform your country’s tax service. Moreover, you’ll be required to submit an annual tax declaration.

Alternative Assets

• Cryptocurrency

Cryptocurrency is becoming an increasingly popular way not only to preserve but also to grow your wealth significantly.

Cryptocurrency isn’t just Bitcoin – it’s thousands of digital coins called tokens. There have even been cases where investors doubled their money in a single day. While that’s rare, one thing is sure: crypto offers real opportunities to boost your financial future.

Your key to succeeding in the crypto world is to understand the market, learn the rules, and gain hands-on experience. Master that, and the possibilities are endless.

One major cryptocurrency advantage is that you don’t need huge investments to get started. Traditional assets often take years to grow, while digital coins can show positive trends daily. Your key is to watch price movements and take profits at the right moment – before the drop.

Another perk? No licenses, no lengthy studying, and no complicated trading terminals. Registration, deposits, and withdrawals are hassle-free. Plus, the crypto market never sleeps – it runs 24/7, letting you trade whenever it suits you.

Sure, trading requires skill – but you can learn. You might choose to explore on your own using online resources, but that often means slow profits and costly mistakes. Your fast way is to find a mentor who provides reliable, valuable insights.

Many have already used crypto exchanges to break free from traditional jobs, earning great incomes on their own terms.

• Knowledge

In today’s world, knowledge is a luxury – and the key to avoiding costly mistakes. Luckily, there’s no shortage of educational resources. From online courses for beginner investors to insightful books, the right information is always within reach. Stay curious, keep learning, and success will follow.

• Buying an online project

Economic downturns drive down the prices of even promising online businesses – making it the perfect time to invest. Once the crisis passes, a well-developed site like an online consulting platform can generate solid profits.

Purchasing a website is a great way to step into business with minimal risk. If things don’t take off, losses are limited. But launching a brand-new business in a crisis is a high-risk game, especially for beginners.

What to Avoid When Saving Money on the Exchange

• Constantly check your portfolio

The value of your assets is constantly fluctuating. Checking too often will only stress you out and lead to impulsive decisions.

• Staying glued to the app or trading terminal

If you can't resist the temptation, it might be time to delete the app. Taking a step back will save your nerves and prevent rash moves.

• Panic selling

Inexperienced investors often sell stocks that dropped in value, locking in losses. This approach is risky, especially if you don’t yet understand where to reinvest your money or if there’s no immediate need for cash. Stay calm and avoid making hasty decisions.

• Chasing quick profits on the stock market

This is a high-stress and risky endeavor. Only invest money you can afford to lose. Never, under any circumstances, use borrowed funds for trading – unless you want to end up in debt. Patience and strategy are your keys.

F.A.Q.

Why is it important to save money?

Saving money is essential for several key reasons: securing financial stability, protecting yourself from unforeseen expenses, reaching long-term goals, and safeguarding against inflation.

What’s the best approach to saving money?

The key to successful saving is setting a clear goal and sticking to it. It’s also crucial to set aside a specific amount and choose a reliable storage and growth method.

How can I protect my money from inflation right now?

If you want to shield your funds from inflation, consider these effective strategies: invest in stocks, use savings and deposit accounts, buy real estate, purchase gold and precious metals, and hold cryptocurrency.

How can I budget money better?

Discipline is the foundation of successful saving. Achieve this by setting a clear financial goal, cutting unnecessary expenses, saving regularly, and opening a savings account to keep your funds secure.