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Decalogue of 'financial horrors' of saving

Saving is essential both to face economic emergencies and to achieve medium or long-term objectives, which is closely related to financial well-being.

This article was translated from our Spanish edition using AI technologies. Errors may exist due to this process. Opinions expressed by Entrepreneur contributors are their own.

There are a series of common mistakes that Mexicans usually make around saving , and that as long as we do not make them aware, we cannot correct them. This is necessary to make saving not just another habit, but also a determining part of our financial well-being.

According to the study "Saving in Mexico: products, instruments and evolution" of the National Banking and Securities Commission (CNBV), 32% of the adult population do not save and, those who do, mostly do so through informal instruments, such as batches or savings at home

Saving is essential both to face economic emergencies and to achieve medium or long-term objectives, which is closely related to financial well-being.

We share with you this Decalogue of 'financial horrors' within the framework of two dates that we cannot lose sight of: World Savings Day , which is commemorated this October 31, and the celebration of Day of the Dead.

Take note, identify your most terrifying mistake and fight it!

1. Don't save

The scariest mistake is not saving! This is an essential part if you want to maintain healthy finances. So you must clearly stipulate what is the percentage allocated to this item. It is encouraging to know that, according to a Coru survey, three out of 10 Mexicans with a monthly income of less than 10,000 pesos have the potential to save

2. Save what is left over

If you leave the savings at the end of the fortnight, there will hardly be anything left to contribute. The money destined for savings must be contemplated within our budget. If you think that it is not enough for you, you could start to analyze your "ant expenses" and you will surely realize that a large part of this can be allocated to your financial goal of saving.

3. Saving without purpose

When we save with a fixed goal, such as a trip, the education of your children, a car or a house, we have a very clear focus that becomes a great motivation that encourages us every day. It is advisable to set real goals, according to your salary and lifestyle, and established in the short, medium and long term.

You could start analyzing your "ant expenses" / Image:

4. Not being clear about the amount you want to save

It is related to saving without purpose. When setting your savings goal, the next step is to define how much you need to allocate each month or every fortnight to meet your goal in the term you want. Ideally, it should be 10% of your income, however, each case is different. Check that you do not misalign other aspects of your budget, such as fixed expenses, such as rent or tuition, or the payment of debts.

5. Relate savings to a burden

The first few times it takes work. Saving is a financial habit that only with practice can we achieve. If you are starting to save, you can start with 5% of your income and gradually increase the percentage, any amount is a great start to form this habit! Remember: saving is a pleasure postponed in time.

6. Don't think about your future

We cannot go through life without thinking about our future. The decisions we make today will be decisive and will make the difference between having peace of mind or not tomorrow. Whether through an Afore or a Personal Retirement Plan, there is nothing like saving to guarantee a good morning. In Mexico, the number of adults with an individual retirement savings account is only 31.3 million (ENIF 2018).

7. Don't save for your children's education

There are products such as educational insurance that arise as a financial need for moms and dads who seek to ensure that their children attend college. Currently, according to data from Coru, only 27% of people are saving for their children's higher education. They say that education is the best inheritance, so if you have children it is time to consider it.

8. Save without having an emergency fund

An emergency fund is a reserve of money that is saved to deal with unforeseen situations. Unlike traditional savings, it does not have a fixed goal. Before starting with your savings, in fact, the recommendation is to make the emergency fund that corresponds to having as a reserve three or up to six months of your salary.

Coru data indicate that only a quarter of the population has sufficient funds to cover expenses for three months in the event of illness, job loss, economic recession or other emergency.

9. Fall into temptation and spend money before reaching the goal

When you have a clear savings goal, it is easier to have focus and resist everyday temptations. Coru figures show that only 34% of people spend less than they earn. Remember to manage yourself properly to fulfill the commitment you have.

10. Save informally

Of the Mexicans who save, 47.9% do so informally: batches, under the mattress, piggy bank, etc., however, in this way, savings are unprotected! Only 4.6% have the habit of formal saving. What is the difference?

Formal savings are those in which resources are protected by financial entities and protected by legal entities that will respond in the event of a problem. Also remember that money loses value over time, saving formally generates surplus value.