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When we started writing this guide, we asked ourselves – What is the savings
situation in Serbia today, and we’ve come to several discouraging findings.
Statistical data shows that a quarter of Serbian citizens are the risk of
poverty, while a third of its citizens feel like they are living rough. The
average income and the average pension are barely enough to meet basic
demands of the average household.

During the 90s, many people lost their bank savings. An independent study
conducted in Serbia in late 2016. discovered that only 28% of Serbian citizens
would be able to cover an unexpected expense in the amount of 200 euros,
37% would have to sell something or borrow the money, while 26% of
citizens claim they have no means of securing that amount. That means that
over two thirds of our country’s population have no savings.

All this tells us that it’s really difficult to save money nowadays. But is it
impossible? The purpose of this guide is to let you know that it’s possible
to have savings, even with the smallest income, only if you’re persistent
enough, and ready to make significant changes.

Could you pay for an unexpected, yet essential expense in the amount
of 200€?

9% I don’t know
26% I couldn’t possibly get that much money
37% I’d have to sell something or borrow the money
28% Yes, I could cover the expense

One of our retired clients told us that if she uses her pension to buy her medication,
she doesn’t have enough left to pay her bills, and if she pays the bills – she can’t
pay for her medication. And every month she is faced with the same dilemma. All
of you whose children are going to school know how hard it is, come September,
to get the money for textbooks and other school supplies, while we buy our clothes
and go to vacation pretty much exclusively in installments. When our washing
machine or our car breaks down, we overdraw our account or pay with our credit
card, even though that is by far the most expensive way of borrowing money, much
more expensive than a regular cash loan. And now imagine that, when faced with
a situation like this, you had your own “stash” that you could use to cover these
expenses.

Test

HOW ARE YOUR MONEY-

MANAGEMENT SKILLS?
Test your money-management skills.

Here’s a simple test which will show you your money-management skill level. To
get the correct assessment, answer truthfully, since the test results are for your
eyes only, and there’s no need to share them with anyone, unless you really want
to.

Pick the answer that most closely corresponds to your current circumstances:

1. I pay all my bills (electricity, pone, water, heating, internet, etc.) on time

Always
Sometimes
Never

2. I save up at least 10% of my monthly income

Always
Sometimes
Never

3. I try to have a sum totaling at least two month’s paychecks set aside for those
“God forbid something happens” situations

Always
Sometimes
Never

4. When I know I have an upcoming large sum payment (car registration renewal,
taxes, textbooks, etc.) I put aside the money in advance

Always
Sometimes
Never

5. I know exactly how I’ll spend my monthly income, and on what

Always
Sometimes
Never

6. I never put aside more than 20% of my monthly income to pay off monthly loan
installments

Always
Sometimes
Never

7. Before buying anything, I always first compare prices of several different

manufacturers or resellers

Always
Sometimes
Never

8. I take out a loan or use my credit card only to pay for large sums or when I have
enough money in my account to cover the entire expense

Always
Sometimes
Never

9. At the end of the month I make a point of checking my bank account statement,
so that I can assess how justified were all my expenses and if the bank records
matches my personal calculations

Always
Sometimes
Never

10. I try to stay informed of the various ways I can save money, such as discounts,
clearance sales, tax deductibles on certain items, seasonal sales, coupons, etc.

Always
Sometimes
Never

YOUR TOTAL SCORE:

RESET

SCORECARD

15 – 20 points
You have well-developed money-management skills.
10 – 15 points
You’re aware there’s room for improvement and you’re trying to hone your
money-management skills.

0 – 10 points
You’ll have to work hard in order to hone and improve your money-management
skills.

If you have 15 points or less, or rather, if you fall in the latter two categories, this
guide is just the thing for you, because it’ll show you how to create your plan to
manage your money in the best and most effective way in seven easy steps. Those
steps are:

1. Set your goals

2. Define your income and expenses
3. Separate your wants from your needs
4. Determine your monthly budget
5. Realize your plan
6. Manage additional seasonal expenses
7. Adapt and constantly perfect

Finally, we have the additional “+1” step, which we designed as the most concrete
way of helping you accumulate small but significant savings that will help you
sleep better at night.

Step 1

SET YOUR GOALS

It is very important to first sit down with your household members and decide
what is most important to you when it comes to money. Once you define these
goals, we advise you to put them in writing, which will give greater weight to this
plan, and make it harder for you to forget about it.

Start with your short-term goals, which you can achieve by saving up over the
course of a year. For example:
GOAL: Repay your overdraft limit (on your credit card) in order to get rid of that
eternal debt which never seems to go down, despite you paying it off each and
every month.

GOAL 1 TOTAL AMOUNT FINAL DATE NUMBER OF MONTHS NEEDED MONTHLY

Credit card debt 26.000 RSD March 2018. 12 2.167 RSD

GOAL 2 TOTAL AMOUNT FINAL DATE NUMBER OF MONTHS NEEDED MONTHLY

Car registration renewal 21.500 RSD March 2018. 12 1.792 RSD

GOAL 3 TOTAL AMOUNT FINAL DATE NUMBER OF MONTHS NEEDED MONTHLY

Save up for a rainy day 24.000 RSD March 2018. 12 2.000 RSD

You can even set multiple goals, but in that case you need to add them up to get
your goal amount.

In order to better motivate and discipline yourself, start with attainable goals and
smaller sums. If your goal is to buy a new TV or a bicycle, you can cut out the
picture of the desired model and put it up somewhere visible, like pinning it on
your refrigerator with a fridge-magnet – that will provide you with the motivation
to persevere until you reach your goal. Once you achieve these first real goals, you
can set goals that might take a bit longer to attain, but by then you’ll already have
practice setting aside money for your savings on a regular basis.

Step 2

DEFINE YOUR INCOME AND

EXPENSES
Once you’ve set your savings goals, it’s important to get a clear picture of where
and on what are you spending your current money. Again, it is important to put it
all in writing, for which you might want to use the MONTHLY HOUSEHOLD
BUDGET charts.

Download the MONTHLY HOUSEHOLD BUDGET charts (print version) »

Download the MONTHLY HOUSEHOLD BUDGET charts (fill-in version) »

Try to keep written track all your incomes and expenses for at least one month
(even when you buy something small, like a breakfast bagel, a bottle of water,
bubblegum or a lighter at the newsstand) and at the end of the month enter the
sum amount of your expenses into this chart. For now, don’t fill out the final chart
with the additional yearly seasonal expenses, nor the column titled “After
revision”, which can be found in the living expenses chart, since we’ll be dealing
with those in later chapters.

This might be difficult at first, since you won’t be able to track everything your
household members spend the money on (but you can write down how much you
gave to whom), and there will be expenses that you forgot about, but an easy way
to keep track of it all is to save your receipts after every purchase, no matter how
small. Also, save every ATM or bank statement, and diligently write them down in
your notebook, at least during that first month. Don’t be worried if at the end of
the month you discover that you’ve spent more than you wrote down (even if you
were very thorough), that’s the so-called expense “black hole” that every
household has, and is not at all uncommon.

If after the first month of keeping written records of all your income and expenses
it turns out you have no REMAINDER, or maybe even have a negative bottom line,
it is even more important to adhere to the advice from this practical guide. If you
have the REMAINDER on paper, but not physically, meaning you don’t have any
money left at the end of the month, that means you have a discrepancy caused by
unrecorded expenses. In that case, try again.

Step 3

SEPARATE YOUR WANTS FROM

YOUR NEEDS
After the previous exercise, which provides you with a detailed insight into your
expense structure, you will no doubt be surprised by the role certain items play in
your overall expenses. Before they decide to quit smoking, people are usually
shocked to discover how much they spend each month on that small pleasure, but
even things such as going out for drinks or buying gifts can be more significant
than you think, due to something we call “impulse purchases”.
Every unplanned purchase or purchase of something that is not essential is called
an impulse purchase. That includes paying for something at a much higher price
than planned. If you’re under stress, you’re much more prone to impulse
purchases, as well as when you’re in a really good mood. In those situations, try to
avoid the risk of impulse purchases by taking only as much money as you need
before you leave your house, and leaving all your payment cards at home.
Now, how to differentiate between your wants and your needs? Before buying
anything that you’re unsure which category it falls into, you could, for example, try
to live without it for a few days or even weeks. Or to ask yourself: how were you
able to live without it until now.
You can have everything you desire, but ask yourself first if you can afford it.

Step 4

DETERMINE YOUR MONTHLY

BUDGET
The first and most important question you need to ask yourself before
determining your household’s optimal monthly expenses is: are your expenses
lower or greater than your income? If your expenses are greater or equal to your
total income, you’d need to try and lower them to a level that will allow you to save
up the allotted monthly sum that will get you to your goal in 12 months.

You can do that by getting back to the filled-in MONTHLY HOUSEHOLD BUDGET
chart that you downloaded in Step 2, and first take a look at the final tally, also
known as the REMAINDER.

If you have written down a zero or a negative amount (that can probably be seen
on your current account in the form of your overdraft limit), that means that you
need to review every single item in the Living expenses chart, especially those
expenses that in the previous step you deemed too high and not essential, and to
try and lower them to an acceptable-yet-realistic level – one that will increase your
REMAINDER and allow you to save up as much as you’ve set out.

Write down those lowered amounts to the second column of the same chart,
AFTER REVISION, and then try to be extra careful when spending money on items
you’ve revised, or rather – cut back on. For example, if you’re a pensioner who
decided that you’re spending too much money on gifts for your grandchildren,
instead of buying them a gift or something sweet every time you take your
grandchild to the store with you, you might want to do that only on holidays and
birthdays, or as a reward for good behavior.

For example, if you save 2,000 dinars every month, in a year those savings will
total 24,000 dinars, or 200 euros, which is a sum that provides you with a certain
security in case of unforeseen expenses. Two thousand dinars is around 15 packs
of cigarettes, ten quality chocolates, one night drinking out with your friends, five
blow-drys at the hair salon or a couple of cab rides.

Why is it so important to set aside something for a rainy day? That is your
protection from unplanned events, such as getting fired, your pension being late,
losing your cellphone, household appliance or car breakdowns, illness and injury
(god forbid), or getting an enormous electricity bill because the winter was so cold
you had to turn on additional heating. Also try not to spend any unplanned income
all at once on something you wanted for a long time, but rather set it aside and
thus start your savings that you’ll increase bit by bit each month.

Step 5

REALIZE YOUR PLAN

Since you’ve reached this chapter, that means you’ve successfully recorded your
expenses, separated your necessities from your wants, and that you’ve finally
managed to compose an optimal monthly budget that will allow you to save as
much as you’ve planned. We congratulate you on your willpower and
perseverance!

Now go back to your household budget chart that you’ve downloaded in Step 2.
There you have your expenses divided into your regular monthly expenses and
your living expenses. Your regular monthly expenses are more or less the same
every month, and you know you’ll have to pay them. Therefore – as soon as you
get your paycheck, immediately set aside the amount needed to pay these
expenses, so you have it on hand to pay the bills as they arrive. Don’t spend this
amount on anything else, so either leave it on your account or in a safe place, if
you’ve already cashed in your paycheck or your pension.

Now take a look at the revised version of your Living expenses column. Divide the
total amount from the column by four, for four weeks per month, then try to
weekly spend at most that amount and do your best not to exceed the set limit.
And if you do exceed it, try to spend less than the set amount next week.

It might be a bit difficult at first, but give it a try and you’ll see it’ll pay off!

Prove it to yourself that you can do it, all it takes is a little discipline and
perseverance. And don’t forget to put the remaining savings in a safe place – your
piggy-bank, or your bank account (the latter of which we wholeheartedly
recommend, because that’s the best way to ensure you won’t spend it.).

You don’t need to save on things that are important to you – your health, regular
diet, important household necessities. Instead, every time you’re getting ready to
spend money on some tiny thing you feel doesn’t really affect your total budget all
that much, try to think about whether you actually need it. For example, instead of
spending money in a coffee shop, buy a coffee “to go” and drink it in a nearby park.
Instead of buying breakfast in the bakery or a fast-food joint, make yourself a
sandwich at home. Instead of bottled water, invest in a pitcher with a water filter.
Communicate over Viber or What’sApp to decrease your monthly phone bill.

Step 6
 MANAGE ADDITIONAL
SEASONAL EXPENSES
Additional seasonal expenses don’t come up every month, but rather every few
months, or merely once a year. If you know you’re sure to have these expenses in
the upcoming 12 months, include them in your savings goals that you’ve
determined in Step 1 of this guide, where we already gave you one such example
(car registration renewal).

Think about which expenses might those be. Are they connected to the start of the
school year, car registration renewal, taxes and insurance or shopping for new
seasonal clothes for yourself or your kids? Roughly how much do you yearly need
for those purposes? Once you have the rough amount, divide it by 12, for 12
months in a year, or rather 12 paychecks, and put aside each month that amount
from your paycheck in a separate wallet (or a separate bank account) in order to
be ready to pay up when the time comes. If during the year you come into some
unexpected income, put that in this fund as well, to make further savings easier.
This habit will help you stay in the black, stop you from taking out loans once these
expenses are due, and give you the foresight to plan for those expenses.

During the first year, write down every additional seasonal expense so that next
year you’d have a better idea of the total sum needed on a yearly level, and be able
to better plan your expenses.

Step 7

ADAPT AND CONSTANTLY

PERFECT
At the very beginning of this huge change in the way you’ve been handling your
household expenses so far, keep in mind that this exercise isn’t remotely simple.
At first, you’ll find it difficult to think about and write down every expense, and
not only your own, but for all the members of your household. But no matter how
much your household members complain that you’re boring them with your
constant questions about how much they’ve spent each and every day, and on
what, this will give you a complete overview of the way you spend your monthly
income, regardless of its amount.

During the first month there may be some errors and omissions, perhaps your
initial plan might prove inadequate, so it might require additional changes and
tweaking. And that’s all right. Circumstances can change, and our plans right
alongside them – that’s life. But you’ll see that after a month or two of handling
your expenses in this manner, it’ll become a routine thing that won’t take up much
of your time, but it will greatly increase the quality of life for you and your
household members. Perhaps during this exercise you’ll come up with your own,
different way of distributing your household budget and savings, which will
simply mean that you’ve completely mastered this guide and had enough practice
to adapt and perfect it in order to completely adjust it to your own needs. And that
is completely okay.

The important thing is to start managing your money in the most efficient way, to
cover your needs with what you have, and believe us, we know how hard it can be
nowadays. That is why we’re trying to help you get more successful at that.

Step +1

SAVE THAT CASH = STASH

A BRIEF POLL: WOULD YOU BE INTERESTED IN A BANKING PRODUCT THAT
LOOKED LIKE THIS:

The bank pays you a 24,000 RSD interest-free loan, which is automatically placed
in a 12 month time deposit account.

You pay a 2,000 RSD monthly credit rate.

At any point, if you need it, you can take out your savings in the amount you
already paid off.

After you pay off your loan, the bank will pay out your savings with interest and a
bonus totaling 27,000 dinars.

That is the amount you managed to save up without any expenses, with just a little
bit of help and motivation provided by the bank, and now you can spend it, save it
for some future use or unforeseen situation, or you can continue with your savings
and increase it even more.

a) Yes
b) I don’t know
c) No

If you’ve answered this poll with a) or b), you’re the right candidate for a credit-
savings product created by Opportunity bank in order to stimulate savings and
saving habits of all citizens, regardless of their income, job situation or ownership
status.
That means that every adult citizen of Serbia, employed or unemployed,
pensioners, students, seasonal workers, freelancers, small business owners,
farmers, etc. can go to Opportunity bank branch offices in Kragujevac, Novi Sad
and Novi Beograd, and without any additional fees, after a really quick and simple
procedure, take out a 12-month interest-free loan in the amount of 24.000,
36.000 or 48.000 dinars, which is instantly placed in a 12 month time
deposit account, and if you regularly pay off all 12 monthly installments (one
installment equaling exactly 1/12th of your loan), you’ll ultimately be able to
withdraw the full loan amount with additional 12.5% interest, which is
Opportunity bank’s way of rewarding you for your discipline and perseverance, as
well as the will to make savings one of your positive habits.

As you can see from the poll question, for a 24,000 dinars loan, your reward
would be 3,000 dinars, so that when you pay off the loan, you’ll be able to
take out 27,000 dinars, while after paying off a 48,000 dinars loan, you’d be
able to take out a sum total of 54,000 dinars.
And no, there’s no fine print, the nominal interest rate is equal to the effective
interest rate, and there are no hidden expenses. If you at any point and for any
reason whatsoever realize you’re no longer able to pay off your loan, you can
cancel your savings early, and take out the amount equal to the credit amount you
already paid off, but in that case you don’t get any interest, a.k.a. “the reward”, so
you’ve lost absolutely nothing and you’ll still break even.

Check out a short informational video about this product:

STEP 1: Define your short-term savings goal along with your household members.
If you have regular monthly income, divide the amount needed for this goal by 12
– and that’s the amount you need to save up each month in order to achieve your
set short-term goal in one year.

STEP 2: For at least a month write down in a notebook all the income and
expenses for yourself and your household members. At the end of the month add
up all your income and write it down in the Monthly household budget chart on
page XY. Then subtract the total of all monthly expenses (regular expenses + living
expenses) from the sum total of all your monthly income in order to get your final
tally, namely the eventual REMAINDER that you can use for your savings.

STEP 3: Now check the part of the chart that pertains to living expenses and
consider which items you feel you might be spending on more than needed on a
monthly basis. Are those expenses wants or needs, and can they be lowered?

STEP 4: Now, in the monthly living expenses chart, in the column “After revision
RSD” write down the lowered amounts for the items you yourself decided need to
be reduced due to their share of the monthly expenditures.

STEP 5: Take your monthly income sum total, regardless of the fact if you’ve
cashed it in full or deposited it in your bank account, and divide it (on paper or
physically) into three parts: 1) to pay your regular monthly expenses, 2) to pay
your living expenses and 3) the part you’ve assigned for your monthly savings
goal. Divide the living expenses part again into four parts, one for each week, and
try not to go over your weekly limit.

STEP 6: In order to avoid situations that might spoil your savings plans, think
about your additional seasonal expenses that you need to prepare for and include
them in your short-term savings goals.

STEP 7: Continue tracking your monthly expenses, and adjust and change your
savings plans accordingly.

GOOD LUCK!

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