By Thami Cele, Head of Savings & Investments, Absa.
We have unique relationships with each of our family members, friends and colleagues – but we all also have our own special relationship with money. Just take a moment to think of how you interact with yours (on the increasingly rare occasions that you happen to have any, of course; thank you petrol price increase).
Do you spend what little you have left over after your bills and obligations on treats that make you happy, or save it with your future needs and wants in mind? Your answer goes all the way back to your childhood: research has confirmed that teaching kids about the value of money early on kick starts financial literacy skills.
It’s one of those things that sets off a light bulb and announces itself as common sense as soon as you say it out loud, but it’s not as obvious as it may seem – all we have to do is look at the rising debt levels of South Africans to see that many of us have dysfunctional or unhealthy relationships with money.
While a number of us appear to have bunked the lessons about being better with our hard-earned money when we were kids, the silver lining is that it’s not too late to learn and even pass these lessons on to our own children.
Most important is knowing that it’s always the right time to save. Life is full of unexpected surprises and expenses – so it is always a good idea to have some money stashed away to fall back on if and when you need it. More than just a money lesson, that is a life lesson that I have learnt over and over.
There are a few other lessons I have had to learn the hard way – these are my top three:
1. There is no such thing as “not enough to save”. Have you ever tried that trick where you put your ‘useless’ coins into a jar and count them after six months or a year, only to find that you have more than you think? Every little bit counts and mounts up. Try the jar, or a piggy bank, or even open a dedicated savings account – even if you only manage to save R100 every month, it will soon become a neat little nest egg. There is always going to be a ‘rainy day’ for you to use the money on.
2. Your best friend is a budget. Write down/type out and stick to that budget. If you don’t already have a tool or template to slot your budget into, you can download one from the internet. Jotting down exactly what you spend your money on will help you see what you need to spend your money on and where you can cut out unnecessary spending (yes, that morning coffee stop on the way to work, we’re looking at you). It will also help you stick to it, and that money you are saving can be put to better use – like saving.
3. Decide on short-term and long-term goals. A short-term goal would be something like saving up for a weekend away, and a long-term goal would be saving for a home or retirement. Identifying different goals will help you prioritise your saving and decide how much to put towards each one.
What I wish I knew about money when I was younger is that good things don’t come to those who wait – they come to those who save for them. And while saving is never as easy as any of us would like, if we each make some small changes and commit to doing it regularly we’ll soon be able to see – and enjoy – the results.