By now, advice on the importance of saving may begin sounding like a broken record for some, however most people do not realise how important it is until they find themselves in a financial bind and require cash immediately.
Unfortunately, when most people try to save they are faced with the harsh realities of how hard it is to actually save, with most people being tempted to spend the money.
“Saving money can help you become financially secure and provide a safety net in case of an emergency. Urging people to save is a timeless bit of personal financial advice, but actually doing it can be another story. If you need a way to boost your savings and stay consistent with your goals, setting up an automatic funds transfer can help,” Standard’s Bank’s Head of Transactional Products and Liabilities Sumaiyyah Isaacs said.
She explained that there are two ways to do this, one can set up a transfer from their transactional account to a savings or investment account or alternatively have a portion of their salary directed into a retirement or savings account offered by their employer, if possible.
“You need to determine the amount that you can save on a monthly basis, then depending on what you are saving for, you can decide whether you want a long or short term savings or investment account. Automating the process lets your savings grow untouched. If you schedule the transfer around the time that your earnings arrive, you ensure that your savings is not mixed with your spending funds. Over time, you get used to living on that smaller amount, making it easier to let your savings build,” she explained.
“Should you consider saving on a daily basis, simple tweaks to your budget such as dining will help tremendously. Saving on a monthly basis may require a lot more groundwork however the amount you save is more notable. Make changes by reducing things such as your internet bill, you could change your cell phone plan to something more affordable, reduce your electricity bill by saving on power usage,” Isaacs said.
For long term savings, one requires even more dedication, Isaacs advised, stressing that the easiest way to get through it by applying the 50/30/20 budget for smart money management. This means you have to devote 50% of your income to necessities, 30% to wants and 20% to savings. If you find one of your allocations exceeds these percentages, make what adjustments you can to fit the formula.
“Keeping a mental picture of what you are saving for helps you stay on track and keeps you motivated. Always make sure you set realistic goals and remember that it is allright to start saving small amounts in the beginning,” she concluded.