National Savings Month is fast approaching and there is no better time for South Africans to consider the importance of savings. Economic pressures, rising inflation and higher costs of servicing debt will continue to erode the real purchasing power of consumers, pushing an already vulnerable consumer towards the edge.
“It’s particularly important, especially when times are tough, that South Africans look at building up cash reserves, so that when an unexpected expense arises there are savings available to dip into. Having a buffer in place will alleviate the need to borrow more and ultimately assist in breaking the debt cycle.” says, Lezanne Human CEO of FNB Savings, Investments and Fiduciary
As day – to – day living expenses increase, that might add to a higher cost of servicing debt, South Africans may feel like they are being pushed into a financial corner, with nothing left to save. There is no better time than now, to step back and review your financial position.
Start by drawing up a comprehensive budget; include your income, what you owe and your expenses – savings should also be part of your personal budget. This will give you a clear picture on where you can cut on every day spending, which debt you need to start paying off first and how much you can put monthly towards your savings.
What’s more, interest rates on cash savings and investment accounts are currently at a high. “Not only do the returns increase on the same capital invested but if those returns are re-invested along with the capital, the compound interest increases significantly,” says Lezanne Human, CEO of FNB Savings, Investments and Fiduciary.
FNB offers a range of cash savings or investment accounts where you will not only benefit from higher interest rates, but your capital and quoted returns are fully guaranteed, meaning there is no risk of losing your hard earned money.