Save today and secure tomorrow!
Saving money is a vital habit for financial stability, both for short-term needs and long-term goals like retirement or unforeseen events. Financial experts recommend having three to six months’ worth of living expenses saved. For example, if your monthly expenses are N$1 000, you should aim to have N$3 000 to N$6 000 in savings. It’s also suggested that 20% of your income go towards savings, 50% to necessities, and 30% to wants.The Namibia Financial Inclusion Survey 2017 revealed that 80% of adults save money, but given today’s economic pressures, this requires discipline. One must distinguish between essential expenses like bills and pensions, and non-essentials like dining out, gym memberships, and luxury items. Cutting back on non-essentials can significantly boost savings.
An emergency fund is crucial for unexpected costs like medical bills, car repairs, or sudden loss of income. Insufficient emergency savings can push people into debt. Therefore, setting specific, measurable, achievable, relevant, and time-bound (SMART) savings goals is key to financial success. For instance, if you aim to save N$20 000 for a holiday in 12 months, you should save N$1 667 per month and track your progress.
Opening a separate savings account can help you stay committed to your savings goals, and starting small is important—there’s no need to wait until you can save large amounts. As an African proverb says, "One twig at a time, a bird builds its nest." Similarly, small, consistent savings efforts add up over time.
If you are in debt, saving can be more difficult. Prioritize paying off small loans first while making minimum payments on others. Debt restructuring or consolidation, offered by financial institutions, can help manage debt by combining several loans into one or rearranging payments to improve cash flow.
Start saving today to work towards financial independence and a secure future.
* Elsie Kambala is the Chief Operating Officer and Head of Unit Trusts at Old Mutual.
* Opinion pieces and letters by the public do not necessarily reflect the opinion of the editorial team. The editors reserve the right to abridge original texts. All newspapers of Namibia Media Holdings adhere to the Code of Ethics for Namibian Media, a code established jointly with the Media Ombudsman.