Saving to make your dreams come true
July is National
Savings month. I wonder when I mention
savings, what images flash through your
mind; what emotions are triggered? Maybe
feelings of deprivation or dreams of a
payoff far into the future? Perhaps thoughts
of a safety net or a rainy day? It would be
interesting to hear your views.
I sense a change in the atmosphere. Two of
my friends decided independently not to shop
this year. One friend gave herself ten
visits to the shops for the year – the rest
she’s doing on the web. The other friend
allows herself only to replace finished
products. They had different reasons, but it
boils down to a type of protest against a
consumer driven society – a society that
measures people by their consumption. It’s
like a detox of the purse.
Another friend, who runs a personal
organisation business, tells me that her
clients are throwing out and sorting out in
an expression of their desire to live
lighter lives. Decluttering can be
liberating. It creates space for new and
fresh perspective. It makes you realise that
you don’t need all that stuff.
I also sense a turn on debt. The global
financial crises caused people to review
their debt positions and understand the
dangers of debt.
If we don’t spend our money on stuff that we
don’t need (as opposed to want), then we can
do so much more with our lives. The key lies
in careful planning and a shift in thinking.
A recently published Old Mutual Savings
Monitor showed that those respondents who
planned their finances five to ten years
ahead, saved significantly more than those
who did not.
Another interesting fact is that these
planners saved more, even if they had more
debt. It indicates that debt was not
necessarily prohibiting people from saving.
In fact, the monitor showed that people with
less debt did not necessarily save more –
they consumed more. The findings highlight
the lack of a savings culture in general.
Unfortunately, despite the change I sense,
there is still a long way to go. There are
more research studies showing that people
with financial plans feel more secure about
their future and actually save more.
Financial plans and savings may sound very
restrictive and boring to you. You may even
associate it with lack of wealth or assets,
which in turn may stem from messages from
society that we have more when we spend
more. In fact, the opposite is true: we have
more when we spend less.
Financial plans and savings will be boring
to you if you don’t have dreams. Dreams to
have, to do or to be. Dreams that will give
meaning to your life. Dreams that will leave
a legacy. Think of your dreams. They will
remain fantasies if you don’t plan for them
to come true. Do you know how much your
dream will cost? Do you know how much you
need to save to reach your dream? If you
don’t, then you’re still just fantasising.
Most people cannot afford to do the things
they want to do immediately. They have to
forego spending now in order to afford it in
the future - sometimes a few months away,
sometimes years or decades away. You need to
have a savings and investment plan to get
you there. Don’t just give up because it
looks impossible. Remember, if you have time
on your side, the magical power of compound
returns will help you get there.
Start now in savings month. Write down your
dreams. Calculate the cost. Enlist the help
of a financial planner to find the best way
of financing your dreams and tell all your
friends so that they can keep you
accountable to your dreams.
Happy dreaming and saving.
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