By Sbusiso Kumalo
As economists warn of a looming global recession, South African consumers are already feeling the pinch. Fuel prices are at record levels, essential grocery items are far more expensive, and it’s going to cost you more to keep your lights on, when your load shedding schedule allows.
With salaries so stretched, sound money management has never been more important. Though your immediate priorities may be paying bills and putting food on the table, now is also the optimal time to save and invest to safeguard your future.
It’s all about balancing short-term planning and long-term thinking. It is never too late to learn good money habits to protect yourself ahead of time from the backlash of a recession.
The limiting narrative that saving and investing is a luxury cash-strapped consumers cannot afford, can end up proving just as costly in the end. Savings act as a buffer against life’s unexpected events, reducing your reliance on credit to see you through unforeseen expenses. Steadily growing your wealth through investments means you don’t have to put your life goals on hold. Even if you start small, developing a healthy investment habit can help to build a safety net that will see you through lean times. It also means that your future plans will stay within reach, whether it be an education for your children, a home renovation, or a dream vacation calling out to you from your bucket list.
In a tough economy, planning for the future requires financial discipline and the bold conviction that your goals are worth it.
Cultivating the audacity to believe that you can realise your goals, despite the economic challenges, will help you to prioritise your savings and investments. They are the tools with which you can build the future you desire.
July is Savings Month, an opportune time for South Africans to develop good daily money habits and focus on their financial goals.
Here are some important tips to consider when it comes to saving and investing:
- Choose the best investment rate:
- Explore your investment options:
- Create an emergency fund:
- Reduce your bank charges:
- Automate your savings:
- Get serious about budgeting:
True financial peace of mind comes from taking control of your finances and developing effective habits, like budgeting, saving, and investing.
This will help you to ride out the tough times, and thrive when conditions are more favourable.
Sbusiso Kumalo, chief marketing officer at African Bank
IOL Business