Your Financial Update #12

As inflation increases, hard times definitely lie ahead for most Namibians. However, don’t despair as this is the time when you should think about investing your hard earned money in order to endure these challenging times.

Q1. Why it is important to get into the habit of saving on a regular basis?

A1. Savings should be regarded as a necessity and not as a luxury. We are living in hard economic times where the cost of living has become very expensive. So a bit savings on the side will carry you a long way through those tough times.

Q2. Most people use the words savings and investment interchangeably. What the difference is between these two?

A2. Saving represents money that is supposed to be immediately liquid and safe. Investing is for money that is supposed to be generating more money.

Q3. What is the best way of starting a savings habit?

A3. The saving journey begins with budgeting and it is important to have a targeted percentage of your income that will contribute to your savings on a monthly basis. This will in turn maintain the discipline as well as adjust with salary fluctuations.

Q4. How can I save when I have so much debt?

A4. Debt isn’t always a bad thing as long as the debt servicing costs are within your affordability. Focus on paying off your highest interest debt first and then, once it has all been reduced, use that money to start saving.

Q5. How easy is it to save?

A5. It takes just 21 days to create a new habit. Put aside a small amount every day and by the end of the month, you should have a lump sum to put into a savings account.

Q6. What should I be saving for?

A6. There are different types of saving goals to meet specific financial needs. A short-term savings plan can be used for things like family holidays or to build a cushion for unexpected expenses. A medium-term plan can be used for large ticket items like a deposit for a house. A long-term plan can be used for retirement or a child’s tertiary education.

For more financial advice from Standard Bank, visit their Facebook Page.