Why is it smart to save?

If you have enough money to live on and something left over at the end of the month, the smart thing to do is to consider saving.

  • Prepare for life’s unexpected events and expenses
  • Realise your dreams and make larger purchases with your savings
  • Grow your wealth by saving and investing in the long term
  • Long-term savings are also a good way to prepare for the future.

Everyone should have some money set aside for unexpected expenses – for example, the equivalent of two months’ expenditure. It’s up to you whether you want to keep your savings in cash or in an account or aim for higher returns than you might get from a regular savings account. One option is to put some of your savings in a diversified investment fund, which gives you easy access to your money.

Save money to make money

You can start saving regularly with as little as 10 euros a month.

If you have money left over after paying your essential outgoings, you should consider regular saving. Think about how much money you need for unexpected expenses and how much you could invest for a longer period of time.

Putting money aside in a savings account is a good start, but have you also considered investing in products that offer higher returns than a regular savings account? With Nordea’s funds, you can start saving regularly with as little as 10 euros a month. The value of funds can go down as well as up due to market movements. You can cash in your fund investment at the redemption value within a couple of days when you need to access your money.

We’ve made it easy for you to make a savings agreement in our mobile bank or Netbank. Nordea’s digital savings adviser Nora helps you  helps you find the best way to save by determining your investment profile and recommending a suitable investment fund for you. If you’re not a Nordea customer yet, Nora can help you with that too. 

Take advantage of the effect of compound interest

The effect of compound interest means you’ll earn interest not only on your initial deposit but also on the interest your savings have earned over time. Let’s say you decide to save 100 euros and the expected annual return is 5%. This means you’ll get 5% interest on your savings each year. After the first year, you’ll have 105 euros. In the second year, you’ll earn interest on 105 euros, so your deposit will have grown to 110,25 euros. And so on. 

The longer you save money, the more money you can earn from just interest without making any additional deposits. This is why it pays to start saving as soon as possible.

If you want to know more about how compound interest can increase your savings, try Yle’s calculatorOpens new window