NOORDWESTER - LICHTENBURG - Saving money is a critical skill that can improve your journey towards financial stability and security.
This is according to Thabo Qoako, Consumer Financial Education Specialist at Momentum Group Foundation, who highlights that creating a consistent savings habit is not just about putting funds aside, it’s about building a strong foundation for your financial future.
People should focus less on the amount and more on the regular practise of putting money away. There are simple ways to help you save and achieve personal financial goals, as small changes can add up quickly.Tips to save money right away:
* Educate yourself about personal finance to make informed decisions about saving and investing and to make your money work harder for you. Also, seek professional advice from a registered financial adviser.
* From time to time, take stock of your personal circumstances in order to understand exactly where you are spending money – it is important to always discern whether your next purchase is a need or want. For example, do you really need that take out or can you do with a meal from your kitchen?
* Establish personal financial goals to be guided by informed decision-making. This might include clearing debt or building an education fund. Apart from building specific, measurable, achievable, relevant and time-bound goals, there must also be a plan of action to achieve your goals.
* It is important to live within your means and focus on what really matters. Start by making a budget which works for you. A handy way to approach this is with the 50/30/20 rule: allocate 50% of your income for needs like rent and groceries, 30% for wants such as entertainment and save the remaining 20%. Keeping track of where your money goes, will give you a clearer picture of your spending habits.
* Set up automatic transfers from your current account to your savings account to make saving a seamless experience. This helps eliminate the temptation to spend the money elsewhere and ensure consistent progress toward your savings goals.
* Prioritise paying off your debt, starting with high-interest debt, to free up more money for savings and improve your financial situation. Most importantly, focus on creating a debt repayment plan that allows you to allocate more funds toward savings once your debt is under control.
* Build an emergency fund as unexpected financial setbacks can happen at any time. Having an emergency fund in place can provide you with the financial stability and peace of mind you need to navigate through challenging situations.
“No matter your circumstances, there are plenty of simple ways you can save money. Without savings, even a small emergency can set you back financially,” said Qoako. “Only a determined approach to budget planning and better awareness of your financial situation can help.”
