Many young adults in Africa do not have the basic skills needed to handle their personal finance skills, with the importance of saving often overlooked. Saving is a vital ingredient in the recipe for financial independence, but so often people find it difficult to put money aside each month. Mastercard shares a few tips on how consumers can become savvy savers by cutting unnecessary expenses and putting a basic plan in place to save for the future.
1. Create a monthly budget, be disciplined, and stick to it
List all your expenses for the month and take a hard look at what you can potentially cut back on or remove completely. This is an important step to better understanding how much money you have to work with each month, and how much you have to save. Budgeting makes you think twice before spending, and it helps you to plan ahead.
2. Be price savvy and shop around
Consumers have the benefit of choice, and can either shop around for the best deal or go online and search product benefits, read up on reviews, and compare prices online. For larger items such as house appliances, don’t feel forced to buy the first product you see, rather gather all the info and save money. Other day-to-day items like buying groceries make an impact on your monthly budget, so ensure you find a store that can offer you consistently lower prices.
3. Keeping your money safe
Going cashless will allow you to monitor your spending habits, thus empowering you to better handle your budget. Payment cards such as the prepaid, debit and credit cards offered by Mastercard through your bank enables you to carry out banking transactions safely without the need to carry cash around. These payment cards offer you a strong barrier of protection with the globally recognised EMV Chip and Pin technology. This means that if your card is stolen or lost no one can withdraw or spend your money as it is protected by the unique pin you selected. Never give this pin out, and ensure it isn’t written down and placed with the card in your wallet or handbag.
4. Plan for your future, and develop a growth mind-set
Changing your mind-set is important, get into the habit of focusing not on the limitations of a situation but rather on ways to better your future financial outlook. Along with developing your work skills, also work on developing your personal financial skills. Get into the habit of thinking, ‘how can I invest in my future’, and plot out a plan to achieve your goals – think about your money as a tool to achieving these goals.
5. Address lingering money problems and ask for help
Don’t get trapped by lingering debt, have a plan to pay off short term and long term debt as quickly as possible. Budgeting will also give you the chance to plot out these items and helps you monitor your plan. Don’t look at savings as another debt, adjust the amount of money you save each month until your short term debts are paid off. Remember, becoming a savvy saver is a process and starts with good habits and lots of practice. You need to start somewhere, so why not start today.
6. Paying it forward – teach your children from an early age
Our responsibility is to help ensure the future generate understand the importance of saving for their future, so involve them from an early age and speak to them about the lessons you have learnt. Give your children a Mastercard debit card, and encourage them to save.