For many of us living paycheck to paycheck, the idea of saving seems like a luxury. We are wrong: saving is a necessity and should be something we all do no matter how much money we are earning a month. Having savings gives us security for emergency expenses or changes of situation, where we would make debt without them. You can save for many different things, usually it is good to have an emergency fund (about three months of salary) and a savings fund for specific goals like education, retirement, holidays, etc.
Figuring out how much you can save a month is easy when you have a budget or plan worked out for your money. Paying your credit account installments regularly should be your number one priority, but that doesn’t mean you can’t work out a minimum amount to put away every month to start working on that emergency fund – that is a step toward making sure that you stay debt free in future.
Before you start saving, your emergency fund should be in place.
This will mean that should something happen like you need to have your car fixed, or you are unemployed for a month, you will not make unnecessary debt because you have the money to take care of the situation.
Once you have your emergency fund in place, you can start looking at monthly savings towards whatever goals you would like to achieve financially. Where you keep that money will depend on what you are saving it for, a few things to think about when choosing a savings plan are:
- How easily you can get to, deposit, and keep an eye on your money
- How much money you need to open the account or plan
- How safe it is
- How much interest you earn on that plan
Do some research and see where your savings can work for you. Make sure your goals are realistic and get a good picture of your financial situation by logging into My Credit Check. As leading credit bureau of South Africa, we provide free reports that will help you to look at your money clearly and bring you on the path to savings sooner.