Hello learners. I am Fenrir. Today we are talking about your future self. We are going to explore the critical skill of saving. Saving is not just about putting money away it is about building a foundation for your entire life. First you must understand the benefits of saving. It gives you freedom. It gives you options. And it gives you peace of mind. But saving does not happen by accident. You must have savings goals and a plan to achieve them. It helps to identify a specific savings goal with a time frame. Do not just say I want to save money. Say I want to save two thousand Euros for a laptop in twelve months. Once you have an approach to achieve it the path becomes clear. The most important concept you can learn today is to treat personal saving as a financial commitment. We describe this as paying yourself first. When you receive your income whether it is a salary or a gift move a specific amount to your savings immediately before you pay any bills or spend on fun. This prioritizes saving ahead of discretionary spending. It ensures that your future self gets paid just like your landlord or the electric company. Strive to save each time income is received no matter how small the amount. And remember the benefits of starting to save from a young age are massive. Time is your best friend in finance. Saving regularly even small amounts creates a habit that will serve you forever. Be confident to set your own savings targets based on realistic aspirations. You know your life best. Believe it is possible to reach those saving targets. Seeing saving as a basic component of a household budget is the mark of a financially mature person.That consistency is what builds security Fenrir. We call this a Savings Buffer. Life is unpredictable. You need to understand the benefit of having emergency savings to cover financial shocks. A shock could be losing a job a sudden medical bill or a car repair. If you do not have savings you might have to borrow money at high interest rates which leads to debt. A key part of this buffer is understanding the benefit of having some savings in a highly accessible or liquid form. Liquidity simply means how quickly you can turn an asset into cash. A house is not liquid because it takes months to sell. Cash in a savings account is very liquid. You need your emergency fund to be liquid so you can use it immediately when the shock happens. Takes steps to have emergency savings to manage financial shocks. It is not just about money it is about feeling safe. Values the additional financial resilience created through saving. When you have a buffer you walk taller. You are not one paycheck away from disaster. You should assess your situation. Are you satisfied with your current savings buffer or are you motivated to increase it? If it is too small do not worry. Just start building it up today. Even a small cushion is better than hitting the hard ground.Now let us talk about how your money grows. This is the magic of Interest Rates. When you put money in a bank the bank pays you interest. But the real power is Compound Interest. Understand the impact of compound interest on savings. This is when you earn interest on your original money plus interest on the interest you already earned. It is like a snowball rolling down a hill getting bigger and bigger. You must use savings methods that make it possible to benefit from it. Leave the money alone and let it grow. However you must also be realistic. Sometimes interest rates are low. But a smart saver continues to save even in a low interest rate environment because having capital is always better than having zero. You must also take care to consider the real interest rate on savings held. The real interest rate is the interest you earn minus inflation. If the bank pays you two percent but inflation is three percent your money is actually losing purchasing power. This is why you must shop around. Use reliable and impartial digital comparison tools to compare interest rates fees and other characteristics of saving account options. Do not just use the first bank you find. Compare fees. Compare rates. Evaluate their impact on your savings. A small difference in rates can mean thousands of Euros over twenty years.There are so many choices Charon. Choosing saving products can be confusing but you just need to know the basics. Know about the different savings options available or know how to find out easily. You can choose a standard savings account a fixed term deposit or an investment fund. Know that different savings products may offer different combinations of fees interest rates and tax relief and imply different types of risk. For example a fixed term deposit might offer a higher interest rate but you cannot touch the money for a year. That is a risk to your liquidity. Know where to access suitable savings products whether at a traditional bank an online bank or a credit union. Understand that the choice of a particular savings or investing option may partly depend on the anticipated time horizon for reaching a savings goal. If you need the money in one month keep it in cash. If you need it in ten years you can look at other options. You must also consider your values. Know that savings products may have different sustainability characteristics. This involves environmental social and corporate governance aspects. Does your bank invest in clean energy or fossil fuels? Choose saving products in line with your preferences including sustainability preferences. You can grow your money while helping the planet. Be confident in choosing savings products in line with your preferences or asking advice if needed. Do not be afraid to ask a bank manager where they invest your money. It is your right.Safety is also paramount. When you put your money in a bank you want to know it is safe. Know how to assess the security of different savings methods. In the European Union we have a very strong protection. Know that funds deposited on a bank account up to one hundred thousand EUR per person and per institution are protected under the deposit guarantee scheme. This means if the bank goes bankrupt the government guarantees you will get your money back up to that limit. Knowing this gives you confidence. However you must also take precautions to keep saved money safe yourself. Protect your passwords. Check your statements. Managing savings requires attention. Be aware of reliable digital tools developed by impartial providers designed to help save on a regular basis. Many banking apps now have features that round up your purchases and save the spare change automatically. Use them. Monitor the growth of savings and make adjustments if necessary. If you are not reaching your goal look at your budget again. Keep informed about existing personal financial management tools. Technology makes it easier than ever. Use reliable and impartial digital tools to support saving decisions. Be motivated to use tools that support financial decision making and improve your financial behavior. Saving is a habit and tools help you stick to it.Finally let us build the ultimate safety net. We talked about a buffer but let us be precise. Know how to create a financial safety net such as rainy day savings. But how much is enough? Know how to calculate how long it will take to build a safety net that could cover three months income. This is the golden rule. Take your monthly essential expenses multiply by three and that is your target. It might take time to build but every Euro counts. Build and maintain an adequate financial safety net through savings insurance and other financial products as necessary. Sometimes savings are not enough. Understand the role of insurance in managing risk. If your house burns down savings will not cover it. That is why you need insurance. Be motivated to purchase or update insurance against adverse events or outcomes with a financial consequence where relevant. Insurance is a partner to your savings. Together they create a wall that protects you and your family. Motivated to create a financial safety net you are taking control of your destiny.Calculate your needs. Trust the math. And let compound interest work for you.Choose products that reflect your values. Green savings build a green future.Start today. Pay yourself first. You are worth it.We will see you in the next lesson. Keep saving!
