We live in a time when putting aside a few Rands for a rainy day often seems impossible for many people who barely make enough to get by, let alone have extra but did you know saving money may save a life?
One can arguably question whether the South African economy would allow you to do so or is a case of forcing you to save those few rands we sometimes anyway end up spending on frivolous items. Often, while it seems impossible to save, it usually ends up being a case of lack of discipline. Now, please do not take this as being judgmental. It is merely an attempt to establish whether opening a savings account is possible or only meant for the privileged few.
To fully grasp the concept of actual savings, whether it is an ordinary piggy bank account or the respected investment that has eluded so many, we must take into consideration the advice of a professional in the field of financial planning. Merissa Meyers, an executive financial planner at a local financial institution in Kimberley, says that saving money means that you are preserving it for future use. While doing so, you should consider inflation. For example, “If I want to save R100 because I will need it in twelve months to purchase something specific, Inflation simply means that your R100 might not be of the same value at a later stage because the standard of living is increasing.
Therefore, you want to save and receive back more than what you initially saved. The difference here is called interest. “Interest should always outperform inflation; otherwise, you would be saving at a loss.” Meyer also explains that financial planning, or financial literacy, is for everyone.
We must first decide whether we want to be financially stable, and to do so, we must understand our numbers. (By numbers, she means debt, tax bracket, living expenses, assets, and liabilities, to mention a few.) She further advises that from past experiences, having an end goal in mind, and knowing that costly unforeseen events might happen in the future, saving is the most reliable way of financially securing your future.
“As a financial planner, I highly recommend that parents teach their children about budgeting, saving, and small businesses from a young age. They should be encouraged to participate in entrepreneur’s market days and be acknowledged and rewarded for reaching short-term savings goals.
All being said, everyone is aware of the rather unpopular fact that saving is not for those who lack the most important characteristic, that of discipline! Without the required discipline, no one can force you to put aside a little something on a monthly (or regular) basis for the future or those dreaded unforeseen incidents. So we have to admit that, in the end, saving is far more important than we make it out to be. It is a lifeline that we could and should create for ourselves.
This would spare us the unwanted hassle of having to fall around like many a desperate fool in a time of need. Not to mention cutting down on those countless sleepless nights when we toss and turn, trying to figure out a plan to get ourselves out of the fix. Well, it is time to financially educate ourselves and instead of being in a fix, make sure that our money is in a fix. A proper fixed investment account at the bank!
So are you saving money?
Writer by Mark Kotze
This blog is from the Diamond magazine issue 2 to check the magazine click here
Leave A Comment