How I Optimize My Savings Rate

A high savings rate is not only important for building wealth but also provides you with more freedom in decision-making. Those who work as freelancers often have more flexibility, but also greater responsibility. Income fluctuates, and there is no automatic retirement provision. Therefore, it is particularly worthwhile to adjust the levers that free up money monthly. 

Three main leverage points are especially effective: eliminating unnecessary expenses, reviewing insurance policies, and managing household finances strategically. As a bonus, you will receive two additional savings tips.

1. Identify and systematically reduce unnecessary expenses

Many small amounts add up to a significant monthly expense. Subscriptions you rarely use, overlapping streaming services, or memberships you hardly notice are classic examples. If you list all debits from the last three months, you will often find several items you can do without significant sacrifice.

Smaller expenses like daily coffee-to-go, spontaneous delivery orders, or apps with a subscription model seem harmless but often add up to three figures over the year. Anything that regularly costs money but does not provide real value should be eliminated or replaced with cheaper alternatives.

The money that is freed up can be specifically directed toward wealth-building. An easy way is a monthly standing order into an ETF savings plan. This way, the amount does not disappear again for spontaneous expenses but works for you in the long term.

2. Review insurance policies and optimize premiums

Insurance is a major cost factor, especially for freelancers. Health insurance is at the top of this list. Those voluntarily insured under the statutory scheme with a high income pay up to the maximum rate. This is currently about 1,174 euros per month including nursing care insurance.

Depending on age and health status, private health insurance can be significantly cheaper, often starting at around 750 euros per month. In many tariffs, the services are more comprehensive. However, the switch should be well thought out, as private health insurance can become more expensive with age, and returning to statutory health insurance is only possible under certain conditions.

Other insurances also deserve a look: disability insurance, liability, legal expenses, or business insurances can often be made cheaper if you compare providers or adjust tariffs. The goal is to keep really important coverage while avoiding unnecessary duplicate insurance and overly high premiums.

3. Manage smarter and keep track

Many try to save at the end of the month – often nothing is left over. It is more effective to set aside the savings amount at the beginning of the month. This works best automatically: a standing order to a separate account or into an ETF savings plan before you allocate the money for expenses.

Regularly get an overview of your finances. A simple budgeting app or an Excel spreadsheet is sufficient. This way, you can identify which expenses are unavoidable and where there is still room to maneuver. If you know your fixed costs, you can consciously allocate the rest for variable expenses without losing track.

The goal is not to scrimp on every euro, but to use money consciously. Those who set priorities quickly realize that they can save more without significant sacrifices.

4. Intentionally increase income

Savings work not only through reduced expenses but also through increased income. There are many ways for freelancers to slightly increase revenue without overburdening themselves. Sometimes a moderate price adjustment is enough to create more room. Additional services or product variants can also help increase the value per customer. 

Another option is to take on projects that are better paid or less time-consuming, so that more remains per working hour in the end.

It is important that the additional income is not immediately spent on everyday life. The simplest way to truly save it is a fixed standing order directly after payment receipt to a separate account or into an ETF savings plan. This way, the money does not disappear into running costs but works for you in the long run.

If you manage to increase your average monthly revenue by 200 euros and consistently set this amount aside, this results in an additional savings volume of 2,400 euros a year. If you invest this sum annually for 15 years at an average return of 5 percent, it will grow to around 52,000 euros. This amount can later provide great freedom in investments, retirement planning, or as a safety buffer.

5. Automatically save additional income

Apart from the main business, there are often small yet very effective income sources. 

This can be the sale of unused items, participation in a side project that only takes a few hours a month, or occasional consulting assignments. Rental income, commissions, or digital products can also accumulate over time.

To make these additional incomes truly impactful, they should not simply flow into your everyday account. The best way is to immediately separate and directly invest or save them in an account. This prevents the money from being used for spontaneous expenses. Over the years, a significant amount can accumulate without having to restrict your current spending.

If you earn 1,000 euros per year through sales, small side jobs, or other additional sources and invest this amount at a 6 percent return, an additional fortune of around 38,000 euros can accumulate in 20 years. This is a solid nest egg or a comfortable pension supplement – all without major lifestyle changes.