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25 Jul 2019 12:25
Saving money is a matter of training your brain
We’ve all been there. We decide that we need to start saving, even if it’s just a little bit every month like the experts tell us, and we set off on our savings journey.
We open a savings account, sacrifice one or two takeaway dinners and proudly deposit a few rand into our savings account. Things are going great.
Then the car, stove, fridge or some other appliance stops working and we need to raid our savings account to pay the repairman. As quickly as we started our savings journey, it has come to a sudden end.
Most people have experienced a similar scenario, and psychologists say it’s one of the main reasons many of us can’t save. They call it “learned behaviour” — essentially the belief that there’s nothing we can do to escape our challenging financial situation. This learned behaviour creates negativity towards saving, making us believe we’re “just not good at saving”. But that’s simply not true.
The good news, however, is that it is possible to unlearn negative savings beliefs. The key is to start achieving small savings successes and grow these over time, and the way to do that is by setting realistic savings goals. These may be as basic as saving up enough money over the next three months to be able to celebrate a milestone, for example, saving R250 this month as the start of an emergency fund. As you achieve these small, realistic goals, you’ll gain the confidence to reach for bigger savings successes, and that will re-programme your savings belief system over time. For as little as R250 you can open an Electronic 32-day Notice Account and earn up to 7.5% interest per annum.
Once you have proven to yourself that you can save, it’s time to expand your thinking. That means setting savings goals for the short, medium and long term, and saving towards all of them. Don’t just save for that proverbial rainy day. Identify four or five specific savings goals and set clear timeframes to achieve them. They may range from a holiday at the end of the year, to having enough money in five years’ time to put down a deposit on a house or car.
Importantly, once you’ve set your sights on specific goals, you need to choose savings options that are best suited to helping you achieve them. If you want to have enough money for a house deposit in 10 years, choosing a longer-term vehicle such as the Electronic 12-month Fixed Deposit will help grow your investment with a better interest rate.
It’s vital that you research the savings options available to you and choose the ones that best match the growth and time requirements for each of your goals.
Another important component of any successful savings plan is to understand the costs involved in the savings options you choose. In many cases these costs are not immediately clear. Both the Nedbank Electronic 32Day and 12month Electronic Fixed Deposit accounts charge no monthly fees and no commissions, which guarantees your savings. This offer is open to all customers, even those who don’t have a current account with Nedbank can now open a current account and an investment account quickly and easily on the on the Nedbank MoneyApp or online.
While we all have different quirks when it comes to managing our money, we all have the ability the save. With a little bit of planning, a change in attitude and the right savings accounts for your specific goals, savings success really is within your grasp.
Visit the Nedbank website: www.nedbank.co.za
Sashia Sunker-Oosthuizen is head of commercialisation at Nedbank Forex and Investments
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