Recently I have been thinking about saving; how important it is to save regularly and a fixed percentage every month. Ideally increasing that percentage annually. It is hard to save when annually goods and services increase with inflation but it is a principle of paying yourself first. Of saving first, then spending. Save first, spend afterwards.
Unfortunately we live in a consumer driven society, spend now, pay later and never save. We are encouraged to use our credit cards or store credit to purchase goods and services. But it comes at a cost, by using credit we end up paying more for an item and something that was on sale may cost more than the original price.
I received this email from Jacques Coetzer of Sanlam and have included this extract
Contrary to what many people think, financial wealth has less to do with earning a lot of money and more with managing money well, protecting your family and wealth, making clever investment decisions and avoiding bad debt.
It is very expensive to be in debt. In fact, if we could see in black and white the real cost of buying on credit every time we transacted, many of us might think twice before swiping a credit or store card. Similarly, we might get quite excited about saving if we were shown a calculation of the investment return we would earn if we saved rather than spent that amount.
I have attached an visual representation of the real cost of credit, please have a look. I would like to hear your feedback.
powered by