Wealth management Saving savvy tips Glenn Pratt, Product Manager for Savings at Standard Bank, outlines some ways to make saving a greater part of your life. Make a plan • Priority one is to control your expenditure: stop non-essential borrowing and spending (like retail therapy!), and get your debt repayments up to date. • Use six month statements for all accounts to establish actual income and expenditure. Draft an objective budget, identify expenditure that you should save for rather than borrow, use all discounts available to you. You will be amazed at the waste and the money saved should go straight into savings. • Start with attainable short-term goals (next year’s school fees) before moving onto bigger, long-term goals (buying a new car). Like exercising, the hard part is starting but, once the habit has set in, getting marathon fit comes naturally. • Once you have a rainy-day fund at least, get expert advice on the next steps into retirement savings and investments. (Your rainy-day fund should be your first priority to minimising budget shocks that could disrupt your financial plans). Baby steps! Establishing the discipline is more important than the amount saved initially. Once the savings habit is firmly part of your normal budget you are ready to move up. Waste not want not • If you tend to overspend, remove temptation by cutting up your cards. A card re-issue is a lot cheaper than a bigger pile of debt. • Do not use credit for day-to-day expenses (unless you settle the card in full every month). If you do, you are creating a debt trap. • Settle expensive, short term debt like cards and overdrafts urgently. • Stop waste immediately, no matter how small. Like debt, it adds up. • Make your money work for you. Don’t leave large credit balances in your cheque or credit card account where it earns virtually no interest. • Explore every discount you can get, including tax rebates, cash discounts, discounts for paying early and so on. • Review your budget and finances regularly. Make your insurance broker and financial advisor work for the commissions they earn from your business. • Don’t be tempted to draw on your savings early. Discipline and patience will pay off in the long run. Other considerations Form a group to save with people who share your interests. Members of the group will help one another stay focussed on the task at hand: saving. Examples are holiday clubs and investment clubs. Don’t draw up your budget without the help of others in your household. You will struggle to save if your financial plans are not aligned. Make your budget a statement of fact and not a wish list. Use actual records for an honest view of what you earn and what you spend. Look after what you have and make it stretch. Live within your means and get the Joneses out of your finances. Spending is no fun if you are left worrying about debt. Take control and don’t spend more than the minimum until you have debt under control. Saving is investing in your financial peace-of-mind. Like exercise, the first step is the hardest but it gets easier once you have started and it is never too late to start: every cent saved puts you in a better position than before. Physical fitness is about the right combination between balanced diet, rest and exercise. Financial well-being is about the right combination between judicious spending, borrowing and saving.