Publication Date: 09/10/2015

Saving money is a necessary and commendable goal, but it isn’t just about depositing your pennies into the bank. Saving should be a philosophy and as such one needs to have a strategy to efficiently meet your short-term and long-term savings goals.

Any good savings plan commences with a budget – itemising your monthly expenses such as; rent or mortgage, food, rates and taxes, electricity, school fees, petrol, food etc. which are normally paid on a monthly basis and non-negotiable.

It is a good idea to create separate accounts for your monthly expenses, short-term and long-term savings. Make sure these accounts are labelled appropriately and that you can access the funds easily and without penalty. Different strategies need to be employed for your short-term and long-term savings goals to be successful. That means knowing the difference between the two.

Generally, your short-term savings are for a period of 1 – 3 years and for depositing money which is not required immediately but can be easily accessed should an emergency arise, a vacation deposit needing to be paid, holiday gifts or unexpected car maintenance. As this type of savings is over a short period customers may not have the high level of returns as they would with long-term savings.

Likewise, your long-term savings should be those funds that you won’t need to access for at least 5-10years. These savings are normally towards the payment of university fees, deposit for purchasing a home, retirement and investment savings or any other large purchases for which it will take time to accumulate the necessary funds for.

Each of our member banks – offer different products at differing interest rates to assist with either short-term or long-term savings needs. The onus is on the client to shop around for the bank and product that is best suited to their savings needs.

Start saving now to ensure a financially healthy tomorrow!