Young people encouraged to save

When young people save, they foster their financial independence, and over time, contribute to a more resilient financial ecosystem for all.

FNB Namibia investment head Erastus Tshatumbu said this on Friday in the wake of World Savings Day on 31 October.

This year’s theme was ‘Dream Big and Save Smart’.

Tshatumbu said saving efforts will in the long run lower household indebtedness, lessen reliance on specific individuals, and create wealth that would be able to sustain immediate families and communities.

“Young people can, in future, also use savings to alleviate poverty in their communities by creating programmes that would yield more returns, such as in computer literacy, tutoring, sport, small business ventures, etc.,” he said.

Tshatumbu said a savings culture comes with discipline and an understanding of the value of money that can be passed on to the next generation.

He said having and achieving independent savings goals is a major source of financial independence.

Tshatumbu said a budget is the starting point of any financial journey.

He said placing all your savings in one ‘basket’ could, however, increase risk and limit opportunities for potential growth.

“Diversifying your savings not only protects against potential losses, but also reduces the likelihood of dipping into those funds for other needs. By choosing a diverse savings strategy, you build a stronger, more resilient financial foundation,” he said.

Tshatumbu advises the youth to open at least two or more savings accounts – one simply for unknown yet uncalled for emergencies, and another for specific objectives which could later grow into an investment, accumulating wealth.

The bank in a statement released on World Savings Day said: “For World Savings Day this year, commit to making saving a priority. Embrace the power of savings and take the first steps toward a brighter, more secure future.”

It suggested practical ways to make saving easier and more effective, including:

• • Creating a budget: Savings and budgeting go hand in hand. A well-structured budget is the foundation of effective saving.

By tracking your income and expenses, you can identify areas where you can cut back and redirect those funds toward your savings goals.

• •Setting up direct deposits: Simplify your saving process by scheduling for direct deposits to go into your savings accounts on any day of your choice.

This automated approach ensures you’re consistently and effortlessly saving without the temptation to spend.

By treating your savings like a recurring expense, you make it a priority in your financial planning.

• •Opening a dedicated savings account: Consider establishing a dedicated savings account, such as the FNB Flexi Fixed Deposit Account.

This type of account ensures you get higher interest rates and keeps your savings organised and separate from your everyday spending. It encourages disciplined saving and minimises the likelihood of dipping into your savings for non-essential purchases.

• • Establishing an emergency fund: Life is unpredictable, and having an emergency fund can provide peace of mind. Aim to save enough to cover three to six months’ worth of living expenses. This financial cushion will help you navigate unexpected challenges without derailing your long-term savings goals.
• •Differentiating your savings: Create separate savings goals for different aspirations. For instance, allocate funds for a vacation, education, a new car, or even a future home. This approach not only helps you track your progress but also keeps you motivated.