Ricochet News

The psychology of successful saving

By Sashia Sunker-Oosthuizen, Head: Commercialisation at Nedbank Forex and Investments - Jul 9, 2019
The psychology of successful saving

Jeffreys Bay - We’ve all been there. We decide that we need to start saving, even if it’s just a little bit every month like the experts tell us, and we set off on our savings journey. We open a savings account, sacrifice one or two takeaway dinners and proudly deposit a few rand into our savings account. Things are going great.

Then the car, stove, fridge or some other appliance stops working and we need to raid our savings account to pay the repairman. As quickly as we started our savings journey, it has come to a sudden end.

While this may sound like a bit of an extreme scenario, most people have experienced it, and psychologists say it’s one of the main reasons many of us can’t save. They call it ‘learned behaviour’, and it’s essentially the belief that there’s nothing we can do to escape our challenging financial situation. This learned behaviour creates negativity towards savings making us believe we’re ‘just not good at saving’. But that’s simply not true.

To be a successful saver, you first need to train your brain

The good news, however, is that it is possible to unlearn negative savings beliefs. The key is to start achieving small savings successes and grow these over time, and the way to do that is by setting realistic savings goals. These may be as basic as saving up enough money over the next three months to be able to celebrate a milestone, for example, saving R100 this month as the start of an emergency fund.

As you achieve these small, realistic goals, you’ll gain the confidence to reach for bigger savings successes, and that will re-programme your savings belief system over time. For as little as R250 you can open an Electronic 32-day Notice Account and earn up to 7.5% interest.

Be sure to align your goals with your savings accounts

Once you have proven to yourself that you can save, it’s time to expand your thinking. That means setting savings goals for the short, medium, and long term and saving towards all of them. Don’t just save for that proverbial rainy day. Identify four or five specific savings goals and set clear timeframes to achieve them. They may range from a holiday at the end of the year, to having enough money in five years’ time to put down a deposit on a house or car.

Importantly, once you’ve set your sights on specific goals, you need to choose savings vehicles that are best suited to helping you achieve them. If you want to have enough money for a house deposit in 10 years, choosing a longer-term vehicle like the Electronic 12-month Fixed Deposit, will help grow your investment with an even better interest rate. 

It’s vital that you research the savings vehicles available to you and choose the ones that best match the growth and time requirements for each of your goals.

Choose wisely

Another important component of any successful savings plan is to understand the costs involved in the savings vehicles you choose. In many cases these costs are not immediately clear. Both the Nedbank Electronic 32day and Electronic 12month Fixed deposit accounts charge no monthly fees which guarantees your savings.

You can be a successful saver

While we all have different personalities when it comes to managing our money, we all have the ability the save. With a little bit of planning, a change in attitude and the right savings accounts for your specific goals, savings success really is within your grasp.

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