Finance news feature for by Standard Bank

Be cool learn to save
When it comes to being financially secure and having enough cash in your pocket; one of the heaviest challenges that many people face is how to save money. While the idea of setting aside a portion of your income is great in theory, in reality most people find it hard to develop this habit.

Regardless of how difficult saving can be, you can develop a savings strategy that is practical, effective and lasting. And while it’ll take a good deal of commitment and sacrifice to reach your personal savings goals, the financial and psychological benefits will far outweigh the short-term cut backs that you may have to make.
So why save?  
Emergencies: If there is one certainty in life, it’s that unexpected things can happen at any time. Whether it’s a natural disaster, an unplanned illness or the need to replace the exhaust on your 30-year-old car, a  well-established savings plan can help to prevent a financial crisis when these situations arise.
Debt prevention: One of the main reasons people get into debt is through buying things they can’t afford. In these instances, people tend to take out a loan where the high interest rates often make it hard to pay off. A well-funded savings account can allow you to pay cash and avoid the pitfalls of borrowing money.
Plan for the future: Everyone has something they are striving for. Whether it’s money to buy a new car, to pay for varsity or to take a trip overseas, these things cost a lot of money. An efficient savings plan can help you to achieve these goals without the drawbacks of debt.  

So, if you’re ready to take control of your future and start saving, here are some tips and suggestions that will help get you started on the path to financial well being.
First off, set up a budget. An accurate budget will allow you to identify all your necessary expenses, which  will give you the ability to work out exactly how much you can afford to set aside for savings.
Money coming inHere are some simple steps to help you set up a budget:
Timeframe: Before setting up a budget, you will need to decide on a time frame. Is it going to be a monthly budget? A quarterly budget? An annual budget?
Income (money coming in): The next thing you need to do is figure out exactly how much money you have coming in.
Expenses (money going out): Now that you’ve worked out how much money you have coming in, you need to figure out how much you spend during the same period. While some expenses remain the same and are easy to figure out, such as rent, others are not so easy to pin down. Expenses such as cellphone, petrol, food and entertainment may change from month to month, so the best way to figure them into the budget is to come up with a monthly average for each one. Add it all up to come up with a monthly total of your expenses.
Calculate the surplus (the left over bits!): Now that you have figured out your monthly income and expenses, you can start to work out how much you have left over for savings. Simply subtract your monthly expenses from your monthly income to find out how much money you have left each month.
Secondly, start a savings plan. Once you have decided to start saving, you will need to develop a plan. While a good savings plan does not need to be an elaborate affair, it should include a basic outline of the methods that will be used to jump-start your savings plan.
Here are some suggestions for developing a practical savings plan:  
Set goals: The best way to work out how much you want to save is to set specific monetary goals. If there is something specific that you are saving for, start by working out how much you will need to save  to pay for it. Next, figure out how much money you will have to set aside each month to reach that goal in a reasonable amount of time. If you are saving for something with a less specific monetary value, such as an emergency fund, then you should try and come up with a figure to shoot for.
Keep track of your money: The best way to ensure that your savings plan is on track is to keep a close eye on your spending. This can include monitoring ATM withdrawals, keeping a copy of bank statements, collecting receipts from entertainment spending and updating your budget to show changes in what you earn or spend. Not only can this help you to identify where your money is going, it can also keep you up to date on how much money you are saving.
Savings strategies: If your surplus income each month is not enough to meet your savings goals, you are going to have to figure out some creative ways of saving more money. While you do not need to resort to selling a kidney or donating blood every week, there are a number of basic ways to help you spend less and save more, for example, eating less take-outs or car pooling with your friends to save petrol.
Finally, open a savings account
One of the basic tools that you can use to help manage and further your savings goals is a savings account. Not only do savings accounts provide a safe, secure and convenient place for you to store the money that has been saved, but it can also help build savings by earning monthly interest.
Standard Bank has a range of savings accounts that are tailor made to meet different needs. For example, if you’re just starting to save, you may want to consider a PureSave account. This is an easy to manage, affordable savings account that pays interest on even the smallest balance. It takes as little as R50 to open an account after which you can add any amount whenever you like. There are no monthly management fees on a PureSave account and every month your first two cash deposits up to R 3000 each are free of charge. It’s ideal for start-up or casual saving.
If you prefer more disciplined saving, ContractSave may be the account for you. This is a simple, but disciplined savings product that is designed to help you achieve your savings goals. When you open your ContractSave account, you sign a monthly debit order for at least 12 months. You decide the debit order amount (the minimum amount is R100 a month) and it comes off your account automatically on the date you choose, after that, you decide how much you want to save and for how long. ContractSave is ideal for long-term savings without complicated contracts or costs.

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