Iipumbu Shiimi, the governor of Bank of Namibia (BoN), in December 2017, when announcing that the repo rate would remain unchanged said, “don’t spend like there is no tomorrow, because there will be a tomorrow.”
Shiimi, who described Namibia as a debt-ridden nation in April, advised Namibians to start developing a culture of saving to avoid falling into a debt trap.
A Namibian Savings and Investment Monitor of 2016, complied by a local investment company, found that 56% of respondents said that they have enough money left for savings after covering all their expenses, while 45% don’t have any spare cash and only 19% of respondents had a savings account.
The Financial Literacy Initiative (FLI) says 89% of Namibian salaries is used to service debt.
You might have a pretty comfortable job today and lose it tomorrow through no fault of your own.
We cannot predict the future with any degree of accuracy, we are exposed to misfortunes that we have no power over and many of our dreams simply may pan out.
Loved ones may pass on when you least expect it and, as is our custom, relatives must be sent off in a dignified manner.
If you do not have a funeral policy for them you’ll have to get money from somewhere to contribute to the funeral expenses and cover your own unforeseen cost, including transport, during the bereavement.
The economy may take another turn for the worse and private education for your children might become more expensive while public schools might become even more undesirable for more Namibians.
Establishing a safety net is now more critical than ever.
So, what’s the plan, should you simply just take another personal loan to pay the year’s private school fees? What about the next year?
Opening a short-term investment account discourages reckless spending, creates a sense of financial stability and the number one rule of “paying yourself first”. Always remember it’s easier to spend money that’s in your pocket than money you have in an investment account. These habits become teachable moments with your children. It sets a good example, showing them how to save instils levels of self-control and greater independence.
So, whether it’s for a the next holiday adventure, a new car, a new tyre, the baby on the way, education, deposit for a new flat or a brand new car, even perhaps events due to the misfortunes of life … a fixed savings deposit accounts is a popular way to save.
Nedbank Namibia offers savings options where you can select a 32, 66 or 88 days withdrawal notice period with no hidden costs, like brokerage or management fees, and you can start by saving as little as N$500. Interest rates can be earned on a monthly or term-effective basis. The notice period is set to prevent you from giving in to the temptation to use funds impulsively.
Investing will always be a good idea but what remains critical is choosing an offering that caters to you specifically. Nedbank Namibia has trusted advisors across the country to help you navigate through this very process, always consult a trusted financial advisor before making a decision.
While we cannot accurately predict the future, we can, with certainty, provide and prepare for our future needs and cravings.