Warren Buffet, the second wealthiest person in the world, once said: “Do not save what is left after spending, but spend what is left after saving.” As for Bill Gates, the number one wealthiest person in the world, he shares that “if you are born poor, it’s not your fault, but if you die poor, it’s your fault.” These two famous personalities have always put emphasis on saving money.
So this week, as we are on the verge of entering the second last month of the year, we will also celebrate “World Saving Day” on 1st November. Therefore, let’s have a look at the saving scenario of our small island, Mauritius.
In this day and age, we are using our credit cards as never before. Hence, as soon as a Mauritian obtains the end-of- year bonus, instead of saving, he or she delves into paying off credit card debts. Changes in lifestyle and increase in cost of living along with demands from children and our personal needs have turned money saving into almost a reverie. When the month starts and our salaries are in our bank accounts, we don’t find a single parking space in any of the malls on the island and by the end of the month, when people run out of money, the malls look deserted.
In this monthly rat race, people almost forget their desires, such as constructing a dream house, buying a car or saving for the education of children. But the expenses are so extreme that the notion of saving doesn’t even occur to them.
Human nature is known to never run out of desires. Saving is putting a full stop or restraining for some time the desires that put us into a no-insurance zone.
We should have a clear vision of what we really need in life. Then only will we be able to do some justice to saving for us and our children’s future. Below is a list of what savings can help us with:
- become financially independent
- emergencies like your car breaking down, losing your job, business could dry up, accidents, etc.
- buy things when they are on sale.
- have a down payment for your dream home or car.
- annual expenses like Christmas gifts, vacations, vehicle maintenance, minor home repairs, fixing appliances, etc.
- remain stress free. Be emotionally, psychologically and physically strong.
Tips for saving
Ask the bank to deduct an amount out of your salary every month into a savings account. You can start with even Rs 500 or any other amount you can comfortably deduct per month. Pretty soon, you'll have more than just emergency money saved up: you'll have retirement money, vacation money and even money for a home down payment.
- With the remaining money, first pay all your bills then make a list of things to buy.
- First walk then run. It means saving enough to form a base before going for any investment plan.
- Use technology; download a budgeting app in your smart phone
- Download your banks mobile app and keep track of your savings
Financial literacy for children
Savings should start from an early age. It will pay off in organizing and saving money throughout life. It is the responsibility of every parent to teach their children the basics of saving and spending, the value of money, and how to budget for desires. Start with a Piggy Bank. When the children are still young, give them some small changes at the end of the day to put in the piggy box.
When they grow up and start getting some pocket money, tell them to put all the changes at the end of the day in their own piggy box. Moreover, reward them when the piggy box is full. It will encourage them to think that saving money is something important in life.
When teenagers start doing some part time work during vacations, encourage them to open a bank savings account. Take them to banks and let them choose among the options available. For instance, choose a bank which also helps the account holders to get loans for higher studies. Give them information about reward programs in teenager saving accounts.
Use bank and offers wisely
Earlier, banks were used only for saving money. But today, banks are serving a larger purpose. So, decide on what you may require and choose your bank. Compare interest rates on saving accounts. Compare interest rate on loans when you take one. See if your bank has any reward program which you can use. Use all tools available to have a secure and stress free future through savings.
Where Mauritians are spending
According to Monthly Consumer Price Index of september-2017of Statistics Mauritius, an overall household budget is divided into 12 categories. Below is the table which shows percentage wise expenditure of Mauritians in each category. (Individual expenditure may differ from overall country expenditure.)
Savita Tiwari is a freelance journalist exploring Mauritius in all possible ways. She loves to write on every subject under the sun, though ‘Education’ and ‘Children’ are her favourite topics. You can contact her on facebook/savitapost.