The money that is kept aside and not spent on current expenditure is savings. People save for different reasons
Precaution reasons – To be prepared for any situation, people tend to keep some money as savings. Imagine your car breaking down at the end of the month when you are running on the last few legs of your monthly income, it would be ideal to have some money to fix it as soon as possible, lt would be even more of an inconvenience if you did not.
Transaction reasons – Some things are too expensive to buy with your income so you save up to be able to buy after a period of time, a car for example. Savings is just that money kept aside for future use or towards achieving a goal.
Speculation reasons – This involves putting money aside for the sole purpose of investing and making a profit.
Saving gives you freedom, it allows you to take calculated risks because it provides financial security. The aim of saving is to ensure you have funds when needs arise so they are usually easy to access. When saving, it is a good idea to keep track of the money you put in and have a goal that you want to reach by a certain time. Maybe you want to go on holiday for Christmas for example, you can work out how much you want to have by then for the trip and start saving towards it. This way you can calculate how much to save each month ahead of the trip and they money will be there for you in your savings account come Christmas.
Some people save with long term intentions and others save knowing they will use the money soon, this influences how and where the money is saved. Keeping money in a jar or a piggy bank is a good idea for short-term saving but if you plan on saving the money for years, it probably isn’t your best bet. You would be better off keeping your money in a depositary institution like the bank. Saving in one of these has many benefits, the major one being “financial safety/security”.
Another benefit of saving your money in financial institutions is the opportunity to earn substantial gains on your money with interest. In simple terms, you get paid for storing your money with them. Ever so often (typically annually), a percentage of the money you have saved is added to your account. So, over the years, the money keeps increasing.
There are some steps that make it easier to save.
- Record all your expenses. Tracking your spending allows you to see what you are spending on and analyse it to make the best decisions.
- Always look for how to cut your spending. Tracking your expenses makes it easier to cut your spending, because you are able to see what you are spending on and choose the less important expenses.
- Budget for saving. You don’t save what you haven’t spent but you spend what you haven’t saved so you should set saving goals. Saving money can be difficult so you can even make a game out of it by trying to find creative ways to say for example, only spend N70,000 a month, or see how many meals you can cook in a month instead of buying food outside.
Having savings is just like having a safety net, you know that if you fall, you have something to catch you. Start saving today and watch how much easier life can be when you are prepared. AXA Mansard has the ‘Save It’ platform which allows you to start saving with as low as Nl00 and earn interest on your savings. It allows you to with your money free and immediately so you can pull it out any time you need to spend from it. There is also the AXA Mansard Money Market Fund not only allows you to save but also gives you earnings on savings
Visit www.axamansard.com to get started on AXA Mansard’s various products today. You can also call 0700AXAMANSARD or reach out to any of our financial advisors to learn more.
