Save? Save you say? Why save when inflation is higher than what a savings account will pay you. Well that kinda misses the point of what savings are really all about. For the average consumer feeling the pressure of the global credit crunch it may seem like saving is unattainable or just a plain waste of time. This is not the case and saving now will help you be in a better position when the economy improves. So how do you go about saving?
- Plan a budget
- Find a savings account
- Set up an automated payment
The South African Savings Institute has declared July 2009 to be Savings month. They rightly point out that South Africans do not save enough. We have a rampantly materialist and consumerist culture here which impulse buys on credit to look good for other people encouraging flash cars but only staple foods to eat at night. This kinda materialism is not conducive to building a developmental economy. The surging new economies of the world like China and India both have massively more saved as a percentage of their incomes than we do.
So what really is the point of saving? Savings provide an economic buffer against the uncertainty of life in a capital system. You should really keep at least three months of expenses saved up to act as a buffer. You could keep that money under your bed but as low as the interest rates offered by savings accounts are they still offset the inflation effect on your cash. You should use a budget planner and then allocate an amount to save every month, even R50 is worth it, then set up an automated payment to your savings account so you never even miss that money, but its waiting there for you when you need it.