With modern lifestyles, there is so much to do, achieve and to pay for.
With a bit of planning, anticipation and patience, the future can be everything imagined and more - without paying interest, says Mark Hawes, certified financial planner at Alexander Forbes Financial Planning Consultants.
He has some advice on when and how to start saving. Here are some tips to get you where you want to be:
Start savings as soon as you can
Today's savings mean extra money to spend tomorrow. Savings gives you extra income in the future to be able to do and have more. If done effectively you would be able to pay for the things you want in cash without having to use your salary. Every bit counts.
Don't be afraid to start small - but start!
Every cent counts. Get started and use the money and income that you have. While R100 may not seem like much now, as you keep adding so your wealth grows. It should go without saying that the more you save the quicker you will be able to buy what you want. Before you know it, you can pay for that holiday you have been dreaming of, with cash.
Budgeting is not new but it works. The objective is first to know where your money is going and what you are spending it on every month. Add up how much money is coming in and how much you are spending every month. What is left over is what you should be saving towards your goals - even if it is not much.
Emergency savings first
Life happens. If you have the money it's not the end of the world, but if you don't it can leave you feeling desperate. It is always a good idea to put money aside for unplanned events - both good and bad. Your emergency savings is the secret to getting everything else you want. With savings you don't have to dip into debt or your savings that you were looking to spend on upgrading your car as an example.
When buying car, if you are just starting out in your career it is best to be practical and look for a reliable car that is economical and doesn't cost to maintain. It would be great for your first car may to be a luxury German vehicle. However, if you can't afford it, it would be more trouble than it is worth.
In time with savings you would be able to purchase your car cash if you were diligent, or at least put down a large deposit to reduce your monthly payments and pay it off faster. The same logic goes for almost every big item such as purchasing the latest smartphone or your first property.
Become familiar with investment assets
If a money-making opportunity sounds too good to be true, it probably is. There are many options out there to choose from and many different institutions that offer savings and investments in all different wrappers.
The trick is to use the best and most appropriate product for your objectives. It is therefore always a good idea to speak to a good financial adviser to assist you with life stage appropriate advice.
Don't break into the bank. Stick to your plan
It is said that luck is where opportunity and preparation meet. It may happen that you get that job you were hoping for but were not able to go on the holiday you were saving towards. Keep the funds safe for your future planned holiday. The opportunity will come around again. Your emergency savings are the keystone to the rest of your plans.
In conclusion, savings is hard if you don't have a good enough reason to save. It means delaying spending your money. But it also means you will have more money to spend in the future. It means you will be able to pay for your ambitions in cash.
Savings will provide economic freedom. With a bit of patience, planning and focus savings can be the means to getting what you want.