5 simple steps to competent money management: recommendations of the National Bank

On the air of the TV channel "First Information" First Deputy Chairman of the Board of the National Bank Alexander Egorov shared recommendations on how to properly manage money.

Alexander Egorov formulated five key steps to competent handling of money.

Step one: you need to save a certain share of income immediately on the day of its receipt, and not try to save the balance at the end of the month. The budget should be allocated only from the amount remaining after savings.

Step two: the financial reserve should be formed according to the so-called ladder system, dividing the funds into two parts. It is reasonable to keep the operating reserve on a revocable deposit for quick access, and send the principal amount to an irrevocable deposit in Belarusian rubles for a period of 13 months or even more than three years. According to Egorov, this approach allows you to fix the rate and exempt income from tax.

Step three: harness the power of compound interest. Egorov recommends choosing deposits with a monthly capitalization, in which the earned interest is added to the principal amount and income is accrued to an increased base.

The fourth step is to use digital tools. According to Egorov, more than 65% of all new bank deposit agreements are now opened online without a visit to the branch. He called it a great marker of the de-bureaucratization of the banking sector and the digitalization of society: just a few clicks on a mobile app to make the money work.

The fifth step is to maintain digital hygiene. When opening accounts online, it is important to keep in mind basic security. Egorov stressed that neither bank employees nor law enforcement agencies never call messengers and ask for a code from SMS. The safest place to save is a personal deposit account.

The main law of savings, according to Egorov, is that it is not the nominal interest rate that is critically important, but the real one, adjusted for inflation. He gave an example: with inflation of 5-6% and a rate of 12.5% per annum on an irrevocable ruble deposit for a period of one year, the net benefit will be about 6% of annual real capital gains.

For comparison, Egorov noted that storing savings at home in an envelope with an average annual inflation of even 5% will lead to the fact that over five years the purchasing power of this money will decrease by almost a quarter.

Photo: Belt archive