Get a head start in saving your money
When you first start a formal job, nothing beats the feeling of having your salary in your bank account and imagining all the things that you can spend it on. It’s easy to live in the moment, because the future seems very far away. But it’s absolutely vital to start planning from the very beginning.
“You may think you want to wait until you are earning more money to start saving, but as you get older, you’ll have to take on more expenses,” says Jacquiline Pack Head of Marketing at Standard Bank. “If you don’t get into the habit of saving and investing towards a sound and stable financial future from the very beginning, you’ll find it very difficult to do it later.”
To take control of your finances, you need to think of the kind of lifestyle you want to lead now, and how you will maintain that lifestyle in the years to come. Work out your short-term (one year), medium-term (three to five years) and long-term (retirement) goals, and then give careful thought to what you need to do now to achieve all of these.
Think about your luxury items and entertainment expenses and work out which of those you really need.
“It is important to have fun now, but it’s also important to make sure that you can afford your lifestyle,” says Pack. “You should still have dinners and go out with friends, but consider whether you really need additional luxuries like designer clothes that you’ll only wear a couple of times.”
Then write out a budget that takes all these expenses into account, making sure that you think of all possible expenses, from the insignificant daily takeaway coffee to the whopping car repairs you have to afford twice a year.
Then it’s time to start thinking about saving. “For your short-term savings that will cover an iPod (outdated?), designer jeans or act as a cushion in case of unexpected expenses, put your money into a PureSave savings account,” recommends Pack. “This offers you good returns, but the ability to access your money quickly when you need it.”
To support your medium-term goals like buying a car or putting a deposit down on your first residential property, put your money into a Notice deposit account. “A notice deposit gives you a good interest rate and you have to give notice when you want to take your money out and that makes it ideal for medium-term investing,” says Pack.
“A money market account can have an even higher rate, but it still allows you to access your money quickly. This is a good option for saving, but you have to be honest with yourself about how disciplined you will be about leaving your savings to mature.”
Last, but certainly not least, you will need to consider various investment products for your retirement planning. “If you are younger, you can look at products with higher risk that provide higher return in the long-term, but your capital is not guaranteed,” explains Pack.
Contact person and issued by:
Surihe Gaomas-Guchu; Manager: PR & Corporate Communication
Standard Bank: Marketing Department
Tel: +264 (61) 294 2529
Cell: 081 2187473