Every month should be National Savings Month so that we don’t stop practising the culture of saving.
Mark Hawes, Certified Financial Planner at Alexander Forbes Financial Planning Consultants, offers a few tips to get you on the right track:
- Start savings as soon as you can
Today’s savings mean extra money to spend tomorrow and gives you extra income in the future to be able to do and have more. If done effectively, you would be able to pay for the things you want in cash without having to use your salary.
- Don’t be afraid to start small – but start!
Every cent counts. Get started and use the money and income that you have. While R100 may not seem like much now, as you keep adding so your wealth grows. The more you save, the quicker you’ll be able to buy what you want.
Budgeting works. The objective is first to know where your money is going and then to know where it is. Add up how much money is coming in and how much you are spending every month. What is left over is what you should be saving towards your goals.
- Emergency savings first
Life happens. It is always a good idea to put money aside for unplanned events such as car maintenance or an unexpected holiday opportunity. Your emergency savings is the secret to getting everything else you want without dipping into debt.
- Be realistic
When buying car, especially if it is your first, be practical and look for a reliable car that is economical and doesn’t cost to maintain. With savings, you will be able to purchase your car with cash or at least put down a large deposit to reduce your monthly payments and pay it off faster.
- Become familiar with investment assets
If a moneymaking opportunity sounds too good to be true, it probably is. The trick is to use the best and most appropriate product for your objectives, and it is always a good idea to speak to a good financial adviser to assist you with life-stage-appropriate advice.
- Don’t break into the bank. Stick to your plan
It is said that luck is where opportunity and preparation meet. It may happen that you get that job you were hoping for but were not able to go on the holiday you were saving towards. Keep the funds safe for your holiday. The opportunity will come around again and you will be able to pay for it cash.
Your emergency savings are the keystone to the rest of your plans. Saving is hard if you don’t have a good enough reason to save, as it means delaying spending your money. But it also means you will have more money to spend in the future and provide you with economic freedom. With just a bit of patience, planning and focus savings can be the means to getting what you want.
Source: Alexander Forbes. Image: Pixabay