The importance of saving

We all have different goals and dreams that are usually based on where we are in our financial life cycle. Hence, it's important to save for all the exciting life events that we dream of.

Making the decision to save today is one of the most important decisions we'll ever make because it paves the way for future happiness and success as we comfortably repay loans, move towards home ownership & a comfortable retirement and other goals as saving is the key to financial independence and building wealth.

With savings you're able to:

• Afford things you want without relying on someone else

• Have cash in an emergency

• Are able to retire in comfort

• And the satisfaction of making a major sacrifice
  

It is always good to save your money within a financial institution and the options you choose depends on where you are in your financial life cycle and your personal financial goals. It is consistently recommended to diversify your saving options by having different accounts based of your goals to expand and improve your financial wellness. The following is a small list of general savings accounts to consider:

• Regular savings account: Allows you to make deposits and withdrawals anytime by visiting brunch or electronically using a debit card or online banking

• Contractual savings account: Allows you to save a fixed amount every month for a minimum period of one year

• Certificate of deposit: Allows funds remain untouched for set periods of time as they have specified fix terms (usually 30,180, or 365 days)

• Long term savings account: Allows funds to remain untouched for a minimum of five years

Basic principles of saving

When it comes to saving persons tend to believe that if you are not earning a lot of money, then saving isn't possible. But the truth is everyone can save because no matter how much you are earning, once you spend less, you saved. Similarly, no matter how small always puts some away for savings.

You may have heard the phrase, "pay yourself first", what does this mean? The first thing you should pay each month is yourself by investing in yourself before anything else is covered. Before you pay any bills, set aside a fixed amount to save towards your goals or reward yourself with a small prize. This guarantees consistent savings and eliminates the risk of not having anything left back.

One of the benefits of saving is earning interest. We know that interest the percentage of your savings that's added on to the principle. With this being said, saving early and consistently in a bank is the most effective way to plant the seeds for your financial security. Don’t get distracted by how much you save just commit to putting something aside on a set schedule and allow your money to grow over time. The interest paid on your savings is either simple or compound. Simple interest is paid only on the money you save or invest (aka principle) while component interest on the other hand is paid on your principle plus on any interest you have already earned. When you're young you're in the ideal position to maximize the benefits of compound interest mainly because compound interest works best to help you achieve your long term goals such as saving for retirement. It helps you build faster and has a greater effect on receiving's over a long period of time.