No matter how much you make, at the end of the day, it is what you save that really matters,” says Rose Miller, manager, strategic empowerment programmes at JN Foundation.
Mrs Miller advises that to ensure you are on the right track, the general rule is to save at least 10 per cent of your monthly salary. She further recommends that if you’re in your 20’s, you should aim to save 25 per cent of your overall gross salary.
“That includes retirement account contributions; matching funds from your company, cash savings or money you have invested elsewhere,” she explained.
Here are six tips to help you save:
- Budget – Write down all the things you know you will spend your money on for the month and put aside funds for savings and for investments.
- Ensure savings are not easily accessible – Having your savings at your disposal may push you to want to dip into it from time to time. Therefore, it is advisable to save in an account that does not have an ATM card, but when you need the savings for the purpose you intended, you can also access it with ease.
- Make all your saving deductions automatic – To reduce the hassle of having to take the funds from your bank account, you can set up automatic transfers with your bank to ensure that a deduction is done each month to your savings or investment account.
- Start an emergency fund – Dedicate five per cent of your salary to an emergency savings fund. This is different from your other savings. Consider it as a financial cushion. An emergency fund should cover at least three months of your living expenses. Situations for which an emergency fund may come in handy include: loss of job, a medical emergency, unexpected home repairs or car repairs.
- Save for retirement – Set aside an amount to invest for your pension. If your company has a pension scheme make sure you take maximum advantage of what is offered. For those who are not so fortunate, you can make your own provision by enrolling in an Individual Retirement Scheme. Preparing for retirement is just as important as general savings. The best time to start is now!
Put aside the amount designated by law each month, this will help you live comfortably when you can no longer work. - Get insurance coverge – Protect your life and property. Life can come at you fast and having life, health, property and critical illness insurance can help to cushion unexpected blows from serious illnesses and death, protecting your savings in the process.