Savings…the secret of financial security

Many people still do not understand the secret of financial security and long-term wealth creation, so they keep on searching for wealth using wrong models. Wealth creation according to expert is about building investible funds through savings.

Then savings here is not alone for those who earn so much, but to everyone irrespective of what you earn. The secret then is planning a savings programme that would enable you put down something somewhere each month before you start tampering with you pay.

Old Mutual’s in its lesson “On The Money – The Big Five Secrets of Money Management” says the secret of savings is like the behaviour of the Lion. “The Lion eats first, ahead of the pack. You too should ‘eat first’ by arranging an automatic deduction from your salary or wages. Lean as we go on…

“I can’t save! There is nothing left to save at the end of the month!” How many times have you heard this? Have you said it yourself? Not being able to save is one of the biggest reasons why some people don’t become wealthy.

Most people understand that they need to save and save “a little bit” at the end of the month whenever they can. But this often doesn’t work, as there always seem to be other expenses that eat into this amount.

The first secret of the Big Five, the ‘Secret of the Lion’, turns this behaviour around and says “save first”, ahead of all other expenses, and not last, out of any leftovers. Like the lion, which eats first ahead of the pride, you should pay yourself first and save a fixed amount each month. Make this savings an automatic deduction taken from your pay; before you start paying other expenses. By looking after your savings need first, you are securing the future of your own pride-your family’s future.

The Secret of the Lion forces you to change your spending patterns, even if you start with a small savings amount, you will develop a savings habit. This habit will make it easier to increase your savings over time. If you practise the Secret of the Lion and commit to an automatic pre-spending savings plan, you will be well on your way to real wealth and long-term financial security.

The secret of the Lion says that we must pay ourselves first and save in order to protect our family’s future. But what is it that we need to protect ourselves from? How prepared are you for these life changing situations?

Ask yourself the Following QUESTIONS?

*What if I lose my job?

* What will happen to my family if I die?

* How will I pay any unexpected medical bill?

*Where will I get the money to pay for any major car or house repairs?

We don’t only need to save for disasters and emergencies, we also save to improve the quality of our lives in the future, and achieve some of our dreams.

Such dreams could be… a car, a holiday, a wedding in the family, a deposit for house, further studies, and birth of a new child, children’s education and retirement.

We save for emergencies and for a better life for the future. We need to get out of the habit of spending everything now. Think of tomorrow! Even if you cannot afford much, get into the lifelong habit of saving.

You are never too young to start saving. The earlier you start, the better for you. So, develop a savings plan. This is the first step towards taking control of your future. This series continues next Monday.

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