Set your savings goals
By Business Reporter
WORLD Savings Day or International Savings Day was established on 30 October 1924, during the 1st International Savings Bank Congress (World Society of Savings Banks) in Milan, Italy and was declared on the last day of the congress.
“It was decided that this should be a day devoted to the promotion of savings all over the world and, as a responsible corporate citizen, FNB Namibia gladly supports this idea,” says Natasha Winkler, Investments Head: Retail Banking.
“Not only is spending more than you earn one of the worst financial habits, but many believe that living within your means may not even be enough. What about those unexpected expenses? Your car suddenly breaks down, you lose your phone and need to buy a new one or an unexpected death in the family occurs and you incur travel and accommodation costs that you did not plan for. Or maybe even, you are exhausted and find yourself needing a breakaway to that tropical island? How does one best prepare for these emergencies and events to ensure that there is always a back-up plan in place?” asks Winkler.
Winkler advises that it should all starts with setting your savings goal. “Before your bonus payment hits your bank account, make sure you have a budget of how you will spend your excess funds as well as planning to put a little (or a lot) extra towards an emergency fund.” She offers more advice on starting emergency savings goals and provides the following tips:
• Emergency funds are kept for emergencies and should not be held in the same bank account from which you will be spending over the holidays. It is good practice to save in an account where you have limited access to your funds either because there is no debit card linked to this account or there is a notice period linked to the withdrawal of the funds.
• Banks have a variety of savings and investment products you can choose from. Choose an account that is aligned to your risk appetite, gives you the highest interest returns but still meets your cashflow needs.
• If you have children in school, remember that your emergency savings should include your “Back-to-School” savings goal. It is often smarter to buy school clothing and stationery in December before the price hikes hit the market in January.
• It is important to make your money work for you and therefore you should only transfer your emergency funds to your transactional account at the time you need it. If you transfer the funds earlier than the need arises, you will lose out on interest income that you could have earned on a savings or an investment account.
• A little saving goes a long way. Making concerted efforts to save small amounts adds up to substantial value over time. Get into the habit of sizing up savings opportunities in the everyday aspects of life.
Winkler added that becoming a saver requires a complete mind-set change.
“The rewiring of our mindsets around our spending behaviour is imperative – accompanied by a reduced reliance on credit facilities and our tendency to blame the economic downturn for the poor financial decisions that we make. We need to realise that our journey to financial freedom and wealth creation starts with growing your savings and investments bank balances and not by indulging in luxuries such as expensive cars and branded clothing.
She encouraged Namibians to make smart decisions this festive season to stretch their dollar and avoid regrets and “Janu-worries”.