STABILITY STARTS WITH SAVING
Identify goals and plan how to reach them
WHETHER you are saving for a major purchase, retirement or your first car, you will never reach your goals unless you make saving a priority.
We are living in shaky times where our economy is unable to create many jobs and, instead, is shedding jobs.
So, for those who are already working, the advice “hope for the best and prepare for the worst” has never been sounder for your financial security and peace of mind than now. Keeping your job is a function of many factors beyond your control.
However, there are other things with in your control that you can do to prepare for the worst. Consider the following tips: Boost your savings fund. Make it a priority to have at least six months’ worth of your living costs saved. This is your emergency money. It is therefore important that you don’t invest this money in a place where you cannot have access to it within a reasonable period. When an emergency strikes, it won’t wait for you to try to release your money – a process which might take three months.
Get rid of debt now.
If you are still employed and have income every month, make it a priority to build your emergency fund while at the same time paying off your debt.
Start with small balances and pay them off as soon as possible so that you can focus on finishing the big ones as more money becomes available from the smaller debt paid up.
Cut back on your spending. Cut out as many luxuries as possible and use that money to slash your credit card and other debt.
I am not saying don’t spend. Yes, spend on needs. Wants? Absolutely not. Boitumelo Mothoagae, a financial adviser at Liberty, says: “Being financially savvy is not only for middle-aged or old people. Building your financial nest should be a priority from a young age; starting with pocket money received as a set allowance or for chores.”
She provides the following tips to assist you on your saving journey:
Identify your financial goals and develop a plan of how you will reach them.
Use a notebook to list these goals and make sure you know the difference between wants and needs to gain a better understanding of
your spending habits. If you don’t have an account, open one with a reputable financial institution and make sure you are aware how much you deposit every time, and how much you withdraw.
Establish a monthly budget and stick to it. Avoid instant gratification.
Phones are cool, but there will always be a cooler one the next month. It’s all about making choices: what can you do without now so that you can have something else later? Financial stability and peace of mind are the results of a conscious choice to save – they do not happen by accident.