Course Description

Now that you have gone through financial planning by setting your goals, analyzing your spending and setting your budgets. It’s time to now understand how you can save the money that you have to put aside monthly.

Saving is an act of putting money away in a safe place or through a product with the intention of using it in the future. With the Covid 19 pandemic affecting many livelihoods due to job losses, many individuals find themselves with no savings to assist them while they search for other jobs.

One should have three months’ salary set aside or saved in the event that you suddenly have a loss of income, you have an emergency, or you experience financial problems. This may be difficult to achieve, but it is a target for which to aim.

Why must I save?

• Will have cash for unforeseen expenses that can happen during the month such as buying new car tyres after you damaged one by hitting a pothole.

• Allows you to plan for huge purchases such as a house or car which may require that one puts down a deposit.

• Allows you to take much-needed breaks by going on holidays and being able to spoil your children during festive seasons.

• It prepares one for retirement and not be a burden to your children once you retire

• Savings gives one peace of mind and help him or her to enjoy financial freedom.

• Allows one to manage debt by using cash and not a credit card for some expenses

• Helps to finance other life achievements such as weddings, graduation parties, anniversaries etc

Saving is not easy especially in the times that we face limited income due to the effects of Covid 19. Even before the pandemic, most households failed to set aside just a month’s salary of possible loss of income. There is no better or perfect time to save and take just one month of commitment to creating a habit.

Ways to save

• Savings Accounts

One can save using the many savings accounts that are offered by banks. These differ depending on the amount required to open the account, accessibility, interest earned, ease of use and risk.

• Notice deposit accounts.

These accounts usually require a minimum deposit as well as a minimum balance. You also need to give a defined period of notice to withdraw any funds from the account. In general, the higher the minimum deposit and the longer the notice period, the higher the interest rate earned. Example 32 day notice accounts.

• Fixed deposit accounts.

These are lump sum saving accounts, where you can deposit as much and as often as you like a fixed amount, for a fixed term, and you are only permitted a specific number of withdrawals from the account within a year, or you cannot withdraw at all during that period.

• Stokvels

Stokvels have become a saving tool for most communities. These group schemes allow for people to put their savings into one collective form of investment and make a commitment as a group rather than an individual. The interest is usually high due to the size of the group savings monthly.