Money invested wisely into a savings account will not only give you peace of mind but also help you achieve goals you never thought possible. Photo: File

Money invested wisely into a savings account will not only give you peace of mind but also help you achieve goals you never thought possible according to Neil Thompson, Head of Product and Customer Value Proposition at African Bank.

Thompson said, Anyone can open a savings account and start saving money to achieve a goal – in fact, you can start right now, it is that simple". 

Thompson advises setting a goal first. This should be followed by deciding by when you want to achieve the goal. t is important to be realistic. Saying you want to drive a luxury car in six months’ time is not achievable, but saying you want to pay off your car in a year is.

With the right savings account, such as a fixed deposit account, and by having scrutinised the bank’s savings interest calculator to ensure you are getting the best possible rate, you will be pleasantly surprised at what an initially small lump sum can grow to within a year,"said Thompson. 

Even delaying to save money by five years can have a great impact on the final result of your efforts, but this should not deter anyone who has neglected providing for their future.

There are fundamentals to investing and saving – no matter your age or how much you have to invest- and they are easy to follow, Thompson says.

African Bank recommends these 5 simple savings strategies:

1. Save as you earn: It is obvious that the earlier you start saving the more you will have in the bank at retirement, for example. The longer you put money away the more compound interest you earn, so the golden rule for a financially sound retirement is to start saving the day you start earning money.

2. Think about emergencies: Life happens and we are often unprepared financially for things like medical emergencies or car repairs. You should put money away specifically to cover such costs on a more short-term basis. Remember that saving for something specific over a short period of time requires the same amount of commitment as long-term saving.

3. Create a stop order: Saving requires discipline. Take the stress off by running a monthly stop order or debit order from your salary into your investment or savings account.

4. Choose wisely: A tax free savings account or tax free investment account are good ways to grow you money faster, so investigate these when shopping for the best way to build wealth. 

5. Take good advice: It is never too early or too late to start planning for your future or achieving a dream. Research the best ways to save, heed tips from experts and put these into practice.

People should not get caught up in believing investing money and things like a savings interest calculator are complex financial systems, Thompson reiterates.

"Setting up the right accounts will ensure that in years from now you have savings and investments to fall back on. This peace of mind will make you happy that you took control of your financial future when you did," concluded Thompson.

Neil Thompson, Head of Product and Customer Value Proposition at African Bank

PERSONAL FINANCE