Monday, 18 October 2010

B ist für Berlin - $aving

Planning my trip to Berlin has been almost a trip on its own - as they say enjoy the journey as much as the destination. Apart from reading up on my travel guides and improving my artist skill, I’m saving. Saving money. And with the joyous exchange rate of 1 Euro = 9.54620139 South African Rands, there’s A LOT of saving to be done. (FYI, Namibian Dollars are pegged to the Rand)

Saving is an important life skill regardless. I think it teaches patience and reward and it’s also about common sense. “Making your money work for you.” That sounds like lame financial advisor speak, but it’s the gosh honest truth Invest your money where it can gain interest! Apart from saving for the savings sake, inflation rates suck and we all need to retire at some point.

So here are a few tips for saving for young people, things that I’m applying to my own life and hopefully this is something that will continue to long after my trip to Berlin.

Have a look at your pay slip and now look at your expenses. Plus think about something you want to specifically save for? Maybe it’s a trip, maybe it’s gadget or maybe it’s just saving for saving sake.

After you’ve deducted the obvious, like tax, rent, instalments and bills, recalculate and reconsider. Have a serious look at what you’re disposable income is and what amounts you’re spending on shopping, eating out, going out and hobbies. The fact of the matter is that we all have compulsory expenses but see where you can save.

Practical example 1: I have a credit clothing account that I’m paying off and I’ve decided not to spend on it till after Berlin.

This is super important! Keeping your saving separate allows you to gain interest but it also stops you from spending it. 10% of your take home salary is a good starting point for saving. Find out how your bank’s rates are. Other savings possibilities include Unit Trusts or Money Market while some post offices offer non-taxable saving accounts.

Practical example 2: Savings come first. Before you pay your bills or buy groceries the first thing you should do is your savings. Save your dedicated amount first – remember it’s for you!

Practical example 3: Get a pension if it's not all ready part of your benefits. The earlier you start the better! You can start with as little as a R100.00 a month and let it grow. I doubt that we’re all going to marry millionaires or win the lotto. So save for your old age and continue to live well.

I think sometimes we’ve become slaves to our own consumerism. BUY NOW BUY NOW. Here’s a new word for you, one that’s been around but has somehow slipped from our diction:

frugal [frugəl]
practising economy; living without waste; thrifty

Practical example 4: So go ahead, practise economy and live without waste. Finish using your products to the last bit, eat your left overs and re-use where you can. Buy in bulk, look out for specials and SALES :)

Practical example 5: Put up a savings chart where you can see it. List the amounts as you save, it’ll keep you motivated and serve as a reminder to keep going.

If you do tend to spend more money than you should, make it easy no yourself. Avoid places that you know you’re going to spend money in. Rather find another outlet.

Avoid spending time in shopping malls and if you are super tempted to buy something, ask yourself: “Do I really need this now?” And be honest, in your heart of hearts you’ll know. (I like adding now to that statement. It allows you the possibility of still attaining it, especially if you’re saving for it. Plus the idea of saving is that it shouldn’t be a burden. There is a good feeling about buying something special for yourself. )

Practical example 6: Place an image or word for what you’re saving toward in your purse or wallet. Should you feel the need to spend, let that little reminder serve as the small voice of reason.

My mom always says "Every little bit counts." and it’s SO true because it all adds up.

Practical example 7: Use products till there completely done, remember to cut bottles and tubes open – it’s amazing what you’ll find inside. You can keep it fresh by covering with some foil.

Practical example 8: PACK YOUR LUNCH!! I can't stress this one enough! I’ve spent ridiculous amounts of money on going out for lunch or buying lunch. Bring what you can from home – you’ll be surprised!! I know I am!

Practical example 9: A lot of retailers have reward programmes these days. I find Infinity Rewards, Edgars Cash Card and Woolies to be the best. If you are spending cash you get rewarded for it by cash vouchers in return.

Practical example 10: Use your small change. If something costs 175.85 use your coin money instead of rounding it up and breaking notes. This is probably more psychological than anything else, but that’s what small change is there for. Retailers always need small change and it’s better to use it than having it lay around in the bottom .

• Every little bits helps because it all ads up
• If you have a pension/savings/investments and you’re paying bills on time it gives you a good credit record :)! It’s important to have a good financial history especially if you want to do the BIG things like buy a house, or get a loan to open a business.
• I’m very proud to say that I do not own a credit card. If you are living on credit make sure you’re paying it off and staying on top of it. There’s nothing as consuming and depressing as owing money to the man. Rather get buy on less than spend what you don’t have.

Happing $aving

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