Be financially savvy: start a saving plan now!

Bokang Moeko – The sooner you provide for that nest egg the better – a small delay at the start makes for a very big difference in the long run!

Paying for expensive clothes works out to be more economical in the end, because they last for much longer. But, given my financial problems it’s virtually impossible to buy anything expensive.

I am at a point where I feel like soon, I will be wearing one of those sad dresses that reduce the body to an angular, gaunt cipher of poverty. Financially, we are just surviving, we are not living at all.

It does not come as a shock then that people are not saving, even “baby-boomers” aren’t saving enough for their retirement – I believe it’s not because they suffer from the delusion that either the government or the pension fund of some benevolent employer will look after them for life.

Times are really hard!

But, our obsession with glitz and glamour makes life even harder.

Many believe extra income would really help. It can go a long way into helping them save. Forgetting that expenditure rises to meet income. Simply put: if you cannot save now you will never save, even with a fat salary.

Majority of people suffer from illusion that on their salaries they just cannot save. They believe that saving M300 or M500 a month is far too little to eventually build up some kind of nest egg that could really come in handy in future. They opt to spend the money on something they don’t need – the amount of time people spend on social media, for instance, has proved to me that it’s not impossible to save.

Within my own circle of women there resides a treasure trove of folksy beauty lore. Don’t be deceived, just because they don’t buy Chanel Le Lift Recounting Massage Mask (R1 170) or Dior Capture Totale One Essential Ultra-Detox Treatment-Mask (R1 165) it doesn’t mean they are not spendthrifts.

They are a nation of consumers and have pawned their future to the hilt in an effort to maintain their living standards. Mindfulness is a joke to them. They prefer to operate on autopilot and that literally means buying everything they think they need. With them, a line between the needs and wants has been blurred and an excuse, a manufactured one, of failing to save.

When you do not have your priorities straight there will always be a reason why you will start “next week” or “next month” (unaware that each year you delay starting a saving plan, you lose out on a great deal of money) with a saving plan. And pretty soon your saving plan will all be forgotten.

It’s worth noting that every time you delay saving it’s not the interest rate on your money in ‘year one’ of your savings plan that you will lose: it’s the cumulative effect of compound interest over many years that you lose (for instance: take someone at the age of 20 who invests M10 000 at a compound interest of 20% over a period of 45 years. At the age of 65 it would have grown to no less than M36.5 million. If the same person waited until 30 to make the same investment the money would have grown to only M5.9 million).

It’s time you have your money deducted up-front from your salary, so you don’t ever have the cash in your hand. Because then you might be tempted to use it. Sign a stop or debit order. That way, saving becomes a way of life.

I promise you will not be shorter of funds than before (just be mindful of your cellphone usage, reduce the number of car trips you are making, take reusable bags to the supermarket, drive cars that are mainstream and buy what you need, nothing more).

It is imperative to start your saving plan as soon as possible – time is a key element, and rate, in investment. Make sure you never run out of money before you run out of breath!