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Tips on how to save to meet financial goals

JOBURG - Nolene Parboo, a savings and investments senior manager of Standard Bank, recently offered advice to residents on the importance of having a well-devised strategy when it comes to savings to meet financial goals.

 

Parboo highlighted that successful saving has many layers to it and mentioned three types of savings plans – short, medium and long-term one can consider for different goals.

“Short-term savings [are normally] for a specific goal such as buying a new TV; medium-term [savings is] for your child’s education and long-term [savings is] for your retirement and an emergency fund,” she explained.

She elaborated on short-term savings, saying it was important for consumers to spend less than what they earn.

Furthermore, it is important to avoid making the mistake of planning to save and not carrying it through.

“Your money should be saved in a separate account, such as a notice deposit type account so you can’t be tempted into spending,” she said.

Speaking of medium-term savings, Parboo mentioned that this option offered the advantage of more favourable investment returns, as it usually offered higher interest rates or guaranteed fixed-rate interest periods.

Long-term savings, on the other hand, were listed as essential in determining the quality of life at the time of retirement, making it critical to save diligently.

Parboo finally highlighted the last savings plan, the emergency fund, which can be used when funds are low without depleting the savings account.

She concluded by urging residents to consult a financial advisor to help them understand the different options and choose the most suitable one.

“We have to understand the difference between saving and investing and their separate roles in helping us build wealth; while saving money is a crucial part of the equation, investing remains an equally important tool for us to achieve a comfortable retirement,” she said.

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