Despite the uncertain economic outlook, saving a little each month will help you reap the financial rewards in the long-term.
The importance of saving requires more emphasis during this time of economic volatility. Despite financial constraints and the popular excuse of, ‘I can’t afford to save’, you still need to make room for saving.
We don’t generally save enough and this ends up having both personal and macro-economic consequences. Saving consistently over time ensures that you protect yourself from unnecessary debt and financial vulnerability. Saving and investing does not happen in a vacuum, they should be components of every money management plan.
- There is no single specific solution for saving but there are sound principles that you can apply. A key to smart money management is having a personal budget; use it to manage income, savings and spending.
- Another key aspect to consider is having set savings or investment goals and sticking to them. Building your savings or investment portfolio takes time and discipline. Creating realistic goals and being committed will help you achieve your goals. Prioritise on ‘saving for the things that count’. Not only will it be worth-while, it will also help keep you focused.
- Don’t build your savings strategy on what is left at the end of the month; you may be setting yourself up for failure. Adopt the save first, spend later strategy. Set up a payday scheduled transfer from your salary account to a dedicated savings or investment account which is an easy and automatic way to build healthy balance over time.
There are a variety of investment vehicles available that will help you kick-start the savings process. Understanding the type of savings or investment product you are depositing money into will empower you as you will be able to balance your return, risk and access needs. Look for products that match your lifestyle, circumstances and goals. Don’t Procrastinate; start saving now! Since we are surrounded by debt, both good and bad, those that start saving early will see the rewards faster. Time plays a huge factor in how your savings will grow, so the earlier you start to save, the more money you’ll enjoy later in life.
How do you save for emergencies? Share in the comments below:
Words: Ancley Jacobs , CEO of FNB Cash Investments. Source: FNB