How to Build a Safety Net now for those Rainy Days

Growing up my parents never spoke to me about money, the cost of living or saving. I was told how important it was to make something of my life, to work hard at school and get a stable job so I can make a good living one day. So I worked hard (enough) at school and got a semi-decent job straight out of university, got my first pay check and blew it all on a really nice watch. So, there I was working really hard with a nice watch but no food at the end of the month.

What is it about us that we must have it all now? We earn more money every year, move up the corporate ladder but come month end, the picture is the same, nothing to show for it. So how do we move from living to work to working to live. Is it that we don’t know enough about money management to do the right things with it or are we overwhelmed by what we are offered and the pressure society places on us?

Improving your future financial outlook comes with setting some long-term goals and taking short term action. Setting a budget, cutting back on non-essential expenses and freeing up some money to put away is probably what you have been told before, you may even have tried, but it’s not always that easy and many of us give up.

Whether you have formal employment or irregular income you have to start somewhere. Saving is not only putting money away for tomorrow or the big-ticket items in life; it’s about changing your attitude to money and building a savings mind-set. It does not mean living a “no fun” lifestyle and locking yourself away so you can’t spend so relax, it means making smarter money decisions every day. Look at what you spend daily and ask yourself, do I really need this; can I buy it cheaper somewhere else or if I buy in bulk? What about eating in or packing a lunch to work, turning off the lights and geyser at night will leave you with more money come month-end.

There are also many invisible costs like fees and charges which are built-in, when last did you have a good look at your statements to see what else you’re paying for, so shop around; you may be paying too much in fees. Buying on credit costs more because of interest, so buy cash or put down a deposit to bring down monthly repayments. If you do buy on credit, building your credit status and having a good credit report will reduce the interest rate you get which in turn will save you thousands over the term of the loan.

Plastic money has taken the reality out of spending. If you’re an impulse shopper, try taking only what you plan to spend in cash next time you go shopping, you might make different choices when you hand out those notes. Long-term savings and investment can only take place if you have something every month to put away. So start by changing some of your poor money habits, try make smarter money choices and shop around, you will soon have that little something to put away.

Then watch it grow!

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