Make savings a priority

During tough economic conditions, doing more with less is imperative. After the announcement of Fitch’s downgrade and general pressure on the economy, one of the key aspects individuals should apply is self-discipline and adopting a savings culture to ensure a rewarding financial future. We all like the nice things, but before we splurge on luxuries or follow fashionable trends, we need to sit down and contemplate whether we really need them and most importantly, ask ourselves whether we can afford them.

Determine the order for dealing with your finances according to their importance. Think of what is absolutely essential for you to survive on and what you can postpone. It all comes down to prioritisation, which is about focus on what to do with your precious earnings.

A good way to determine your financial goals and expenses can be to use the traditional Eisenhower prioritisation matrix, named after former American president, Dwight D. Eisenhower who wanted to increase productivity. By adapting the matrix to focus on finances, it serves as a great tool to navigate your finances effectively.

Prioritise your finances by urgency and importance in three categories with different strategies:

1. Do First! First focus on important financial obligations that need to be met within a specific timeframe. Examples of this could be your housing, contribution to your pension fund and daily expenses. Also setting aside a monthly amount in a savings or investment account, should be a priority on payday.
   
2. Schedule: Important, but not-so-urgent obligations that you can schedule or save for, like maintenance of your vehicle or renovating your house. When the time comes, and you have saved enough, you will be able to meet these obligations.
   
3. Don’t do: What is neither urgent nor important, do not do at all. This includes getting rid of unhealthy habits that are draining your hard-earned money. Think about using those funds to grow your savings account instead.

By applying self-discipline and practicing these three steps, you will be able to plan for a secure financial future.


By Hayley Allen
Head: Corporate Affairs