We keep getting the call; regardless of age and life situation, you should have a buffer account. – The consequence of not having a buffer account is that you have to finance the unforeseen expenses in an expensive way. More people may take out consumer loans, pay on credit, or borrow from family. It is unfortunate. So says civil economist Hallgeir Kvadsheim, known from Luksusfallen. Hallgeir Kvadsheim encourages everyone to have at least one to two months’ salary in a separate buffer account. Photo: Rolf Petter Olaisen / news Figures from Statistics Norway in 2021 showed that more than 900,000 Norwegians will not be able to cope with an unforeseen expense of NOK 19,000. The number has probably increased in the past year as a result of interest rate increases, the electricity crisis and increased expenditure on groceries and fuel. Economists also notice this. Emptying the buffer accounts CEO of Norsk familieökonomi, Terje Hamre, has no doubt that the hard times have an impact on the savings accounts. – There are more people who go into the so-called buffer account and withdraw from it to make ends meet. There is no doubt that people are struggling now. Bank manager at Sparebanken west in Sandnes, Eirik Haver, also notices a change in customers. Eirik Haver at Sparebanken Vest in Sandnes says customers want a different type of dialogue. Photo: Elise Pedersen / news – It is clear that customers want a different type of dialogue now. Before, they were happy to contact us when they got a loan, and wondered about things related to it, says Haver, and continues: – Now they come to us more often for tips with regard to savings and buffer accounts. They notice the increased expenses, and ask the bank what it is wise to do to make ends meet. The three economists news has been in contact with in this case all recommend having one to three monthly salaries in the buffer account. – But it depends on how much you own. If you own a car and a home, it is recommended to have more in the buffer account than if you rent a home and don’t have a car, says Kvadsheim. Increased food prices The comparison of food prices and the wage trend says something about whether you get more, less or the same amount for your money. When the development of food prices is higher than the development of wages, it means that food has become more expensive. Both figures are averages for the specified period. Read more about sources and reservations here. How much food prices have increased in the last year, compared to wage development Food Dec 2021 – Dec 2022 Wage development Forecast for 2022 Saving in difficult times But is it possible to build up a buffer account, even in difficult economic times? Yes, replies the bank manager, the family economist and the civil economist. – Many people are stunned by the large numbers. Saving 50,000 in a relatively short time is not easy. Especially now, but if you manage to save 10,000 during 2023, that’s gold too. You just have to start somewhere, says Kvadsheim. Policy rate in percent The policy rate is set eight times a year by Norges Bank. The policy interest rate governs the interest rates in the banks, and affects your housing costs. The aim of raising the interest rate is for the high prices to come down again. The forecast tells us how Norges Bank thinks interest rates will develop in the future. Read more about sources and reservations here. A higher interest rate means increased expenses if you have a mortgage Voluntary coercion If you have the opportunity to set aside money, but still can’t do it, Kvadsheim encourages something he calls “voluntary coercion”. – One way to do that is to add deductions on the same day or the day after you get paid. Either 500, 1000 or 2000, into another savings account, he says. Hamre in Norwegian family economics says between 20-40,000 in a buffer account should be a target. – In order to achieve such sums, you can let between NOK 500-1000 a month tick in automatically. You can then build up a sum that you can use on the day you have an unexpected expense. Start small If you don’t have the opportunity to set aside NOK 500-1,000 a month for the emergency account, anything is better than nothing, says Kvadsheim. – Starting with a 100 note or 200 kroner can be a good idea at the start, then you will see how easy or difficult it is. I think many people will see that it is possible to save, even if times are tight. Eirik Haver at Sparebanken vest recommends that you do not set aside too much money at once. – Don’t go too high, because that means you have to go in every month to drain the buffer account. Find an amount that you think you can manage each month without touching it. Budget Eirik Haver at Sparebanken vest says that customers who have a budget also have a better overview of which expenses they can do without, and where they can make changes. Terje Hamre in Norsk familiekonomi points out that in good times people like to set up subscriptions with various players. – There is a lot that eats from account all the time. Go through the features you have on your account and consider whether you use it and whether you really need it. If you’re careful about it, you can save both NOK 1,000 and 2,000 by canceling the subscriptions you don’t need. Terje Hamre in Norwegian family economics. Photo: Elise Pedersen / news Better shopping habits Many also have a way to go when it comes to their shopping habits, Kvadsheim believes. One of the tips is to become more aware of your shopping habits. – There are big differences between full-range stores and discount stores. You can also act later and coordinate better when there are two or more of you. We often see in the Luxury Trap that you have no control or overview of who buys what. There is a lot to save here. He also points out that you should plan well before your shopping trip, and try to stick to one shopping trip a week. Get good interest on the buffer account Now you have read several good tips from the economists, and may decide to create a brand new buffer account. But a regular current account is not necessarily the best. – You should get as good interest as possible on your account. Hopefully you won’t need to use this money, so it will just sit there and earn interest, says Hallgeir Kvadsheim. The best thing, according to him, is to set up a high-interest account. Preferably in a different bank than the one you use in everyday life. – You often get higher interest rates at local niche banks, and then the account is out of sight. You will not be tempted to use the money if it is not in the same mobile bank as the one you usually use. Terje Hamre in Norwegian family economics points out that this is money that you should be able to use at short notice. – It is important that the buffer is in an account from which you can withdraw the money, without interest being deducted. I do not recommend keeping the buffer money in funds.
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Economists’ best advice for saving in a buffer account – news Rogaland – Local news, TV and radio
