AVO bank expert shares money saving strategies for low incomes

Tashkent, Uzbekistan (UzDaily.uz) — Individuals can form a financial safety net even with a small income by managing expenses correctly and developing a habit of regularly saving money, according to AVO bank online banking expert Viktor Zhivov. The expert noted that salary size does not always determine wealth levels, and outlined common mistakes that prevent savings along with simple tools to control personal finances.

The average salary in Uzbekistan is about 6.4 million soums, but many families in the regions and within the education and healthcare sectors live on 3 million to 5 million soums per month. Under these conditions, managing a small salary becomes a matter of financial survival.

Income levels do not always dictate the existence of savings. Over the long term, the habit of saving is more important than the return percentage. A person who consistently saves 5 percent at a modest interest rate will surpass someone who saves on a residual basis while chasing high rates over 20 to 30 years, because interest accrues on already accumulated funds. According to data from AVO bank, clients with modest but disciplined savings habits often maintain a more stable reserve than those who earn more but spend everything.

Many people experience the effect of running out of money ahead of schedule. Official inflation stabilized at around 5.5 to 7 percent by mid-2026, but energy tariffs are rising. In 2026, electricity and gas prices increased by approximately 9.9 percent, while inflation in the service sector is more acute. Consequently, mandatory expenses consume 70 to 80 percent of the income for many individuals, and the least affluent families spend up to 66 to 71 percent of their budget on food alone.

Two local factors further complicate the situation:

• Income instability. About 38 percent of employed individuals in the country work in the informal sector without a fixed salary or social protection, making saving with fluctuating earnings more difficult.
• National traditions. According to a 2025 survey by Yuksalish, 65 percent of families spend an amount comparable to their annual income on weddings. Every fourth family borrows money for this purpose, and 46 percent admit that public pressure is the primary reason for the spending. Traditional events like tois, sunnat-tuys, and mandatory gifts can deplete family budgets and savings within a single season.

Emotional spending also affects budgets when tired individuals buy unnecessary small items. AVO bank specialists observed that these irregular, unnoticeable transactions, rather than major purchases, frequently prevent people from maintaining a positive financial balance.

Controlling expenditures begins with several successive steps:

• Audit and record income. Listing all income and expenses for the past month is necessary before attempting to save.
• Set financial goals. Concrete goals, such as saving 3 million soums for tuition fees, provide better motivation than abstract desires to be wealthier.
• Create a personal budget. Categorizing expenses helps separate fixed mandatory costs, such as utility bills, rent, basic food, and transport, from variable expenses that can be adjusted.
• Identify areas to trim without losing quality of life. This includes making a shopping list before going to the market and avoiding grocery shopping while hungry.

The main principle for successful saving is the "pay yourself first" rule. Behavioral studies from the Save More Tomorrow program by Nobel laureate Richard Thaler and Shlomo Benartzi demonstrated that when savings deductions occur automatically on payday, the average savings rate rises from 3.5 percent to 13.6 percent. This relies on the architecture of choice rather than willpower, as individuals do not spend money that is not visible on their main account. The United States legally established this principle in 2025 as a standard for retirement savings. The exact percentage to withhold is individual, and beginners can start with a symbolic amount to establish regularity.

Managing unexpected income requires specific attention. Nobel laureate Milton Friedman showed that low-income individuals tend to immediately spend unexpected windfalls like bonuses or monetary gifts received at tois, whereas wealthier individuals save most of them. A practical compromise is the 50/50 rule, where half of the bonus or gift money is spent on the family immediately, and the second half is saved.

The 24-hour rule also helps manage expenses. Approximately 70 percent of impulse purchases stem from momentary desires that fade within a day. Delaying a purchase by 24 hours increases the likelihood of saving the money.

To manage online shopping, where one-click payments lower the barrier to spending, individuals can physically separate their budgets by setting a strict spending limit and using a separate card funded only with that specific amount. AVO bank noted that clients who use a separate virtual card for online stores exceed their budget less frequently. The virtual UZCARD from AVO bank is issued instantly and free of charge within the application, carries no maintenance fees, and can be linked to Click or Payme for QR code payments. It prevents spending more than the transferred amount while keeping primary funds separate.

A reserve fund should cover monthly expenses for a period of 3 to 6 months to cushion against domestic emergencies. This fund must be built gradually.

Mental accounting assists in this process. Field experiments confirm that when savings are physically separated from daily funds and kept in a separate named account, the probability of preserving the money and reaching the goal increases by approximately 40 percent.

Protecting savings from depreciation is also necessary, as cash kept at home loses purchasing power due to inflation. Portions of money not intended for daily use can be kept in banking instruments depending on the financial objective:

• Cash at home: Used for small daily expenses. Provides instant access, but carries a high risk of being spent.
• Card (including virtual cards): Used for daily payments. Provides instant access and remains readily available.
• Savings account: Used for a financial safety net. Allows deposits and withdrawals as needed.
• Term deposit: Used for long-term goals. Access is limited by the term, which protects against impulse spending.

This strategy focuses on discipline rather than high returns, ensuring the reserve fund is protected from daily spending.

The most common mistake for beginners is imposing overly rigid restrictions, which can lead to a complete breakdown in saving habits. A second error is spending savings on daily needs, whereas the safety net should be reserved strictly for emergencies like illness, job loss, or critical equipment failure. A third mistake is lacking a plan and ignoring unexpected expenses, which can cancel out prior progress during a financial disruption.

Individuals should introduce saving habits gradually using modern banking tools by opening savings accounts with top-up options, setting up automated transfers on payday, and dividing money across different cards and accounts within banking applications. AVO bank experience indicates that automation and account separation provide reliable discipline to help achieve financial stability regardless of initial income levels.