The right time to save money
Personal finance spending studies found that November and December, filled with events like Black Friday, Christmas and New Year's celebrations, are peak months for spending. The post-holiday season in January and February is typically associated with times when money is tight. However, the right savings strategies can turn this normality around.In celebration of Savings Day, annually commemorated on 31 October, why not plan on how to save money for the next few months to start the following year free from money worries? Perhaps, this is the right time to save money.
Here are the following money-saving tips to consider:
Stick to your budget: It is easy to overspend during the coming months since they are filled with events, which equates to much more spending. However, stick to your budget and only spend what you need, placing the rest in that savings account. Creating a budget allows you to track monthly income and expenses to see where your money goes. Also, set short-term and long-term goals for yourself to stay
motivated. Saving is easier when you know what you are saving for.
Take advantage of the repo rate reductions: On Wednesday, 16 October, the Bank of Namibia's Monetary Policy Committee announced a 25-basis-point (bps) decrease in its repo rate from 7.50% to 7.25%. The reduction in the repo rates gives borrowers some much-needed flexibility in managing household cashflows. It also leaves consumers with more money in their pockets. Instead of spending it, some of the extra cash can go to a savings account.
Save the tax relief funds: In March, the Namibian government announced the much-awaited tax relief measures, exempting Namibians who earn less than N$100 000 from paying the Pay As You Earn (PAYE) tax. Effectively, all individual taxpayers will be exempted from paying tax on the first N$100 000 of their income as of 1 March, and these changes affected the PAYE tables. The media widely reported that
this development would inject N$646 million directly into taxpayers' pockets. As a result, some savings are available across the table, resulting in back pay for employees, with the others expected from October onward. To take advantage of the situation, consider saving the surplus and putting it away in a savings account.
Work on savings habits: Saving money will help build a healthy safety net for unexpected financial situations. It is generally believed that one should put away funds equivalent to three months’ monthly expenses to build up a financial safety net. Saving for a specific goal motivates you to take control and responsibility for your finances.
Open an automated savings account: Bank Windhoek has many savings options, such as call accounts, notice deposits and fixed deposits. Depending on savings needs, customers can choose a more flexible product that gives them access to their money. The bank allows customers to set up an automatic transfer to a savings account each payday or whenever possible via the mobile app or internet banking platforms.
Use your bonus wisely: For those who will receive a bonus payment towards the end of the year, firstly, make sure that you set aside some of it to honour your financial commitments at the beginning of the year, such as paying school fees and buying school uniforms, or putting away that money for that purpose when the schools open. You could also pay the mortgage or rental payment a month in advance.
Cancel unused subscriptions and have a shopping list: Review subscriptions to streaming services, apps or magazines and cancel the ones you no longer use. Stick to a grocery shopping list to avoid impulse buys. There are many ways to save money. These are just a few. Remember, you can start with a small monthly amount. The earlier you start, the better. This is because the most significant achievements come from small, deliberate actions that accumulate over months, years or even decades, forming the foundation of lasting success.
*Samuel Linyondi is Bank Windhoek's communication manager.