July is National Savings Month and while we should always be putting some of our hard earned cash away each month, it is good to be reminded as to why we should be saving.
Saving money is a tough call for most of us. We understand why we should do it. We even know that it is a wise move. But, when push comes to shove and the debt overshadows all reason, we end up not saving anything at all.
All signs point to the fact that should you get into the habit of saving on a regular basis, you will grow other areas of your life too.
Let’s explore that and touch on how saving can help you succeed.
- Focus in on a savings goal
If you are just putting money away for the sake of saving but with no other specific goal in mind, then you are more than likely going to stop the savings at some point.
Decide what you want to save for and keep reminding yourself of that goal every time you put away that money.
- Have a forced but flexible savings portal
People tend to put too much pressure on themselves by taking on a savings investment that supersedes their capacity to contribute. Be realistic about what you can afford (10% of income is always a good marker) and find a vehicle that is flexible.
For example, there is a savings policy that is built for tax saving reasons whereby you don’t accrue tax on the interest accrued.
Speak to your Financial Adviser about the best options for you.
- Find the vehicle with the best interest rates
This will take some time and you may want to call on the help of an investment guru. If you are going to put your money away, you may as well gain the best interest you can.
- Decide what risk factor you fit into
Dependent on your goal and timeframe, where you invest (as in the funds you choose) need to match your risk aversion. Are you an aggressive investor or a passive? Again, your investment expert will guide you here. You don’t want to be stressing over falling rates if you are not an aggressive investor.
- Savings can free you from worry
Yes, that proverbial slush fund can be used for a rainy day. And when it rains it normally pours, so it is wonderful and stress-relieving to know you have an avenue for those types of days and moments.
- Becoming financially independent is exhilarating
It may take a while but your goal with saving is to get to the point of being financially independent. Being financially independent means different things to different people. So, decide what that looks like and keep the goal in mind always.
- Savings doesn’t only mean putting money away
You can save on everyday spending as well. Think about shopping coupons. Think about loyalty programs. Think about online shopping. It is a known fact that shopping online for food, clothing, shoes, house items, toiletries, etc, can save you up to 20%. The reason is we tend to buy exactly what we need when online as opposed to the risk of window shopping temptations.
Saving, whilst a swear word for some, can lead to success on so many fronts. Start small and work your way up to financial freedom.