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WITNESS (Durban)
Wednesday, 29 July 2009, p. 9
An Absa advertorial in support of National Savings Month.
SAVING MAKES CENTS
Now more than ever, saving makes Annuities will put you in control of your you motivated, make a list of all your
sound financial sense. Ideally you need financial future. debts starting from the smallest balance
to save for short-term needs and plan to the largest. Pay the minimum payment
for your long-term goals and Absa has a A savings account can also act as an on every debt and put your extra
range of savings and investment products emergency fund and should cover about amount towards your smallest debt until
that will help you do both. 5 or 6 months of your living expenses. its paid off. Then add the money you
This money can help you to survive a
would have spent on that debt to your
By investing in a savings plan, you personal misfortune, such as ill health
extra amount and put all that money
will soon build up a nest egg that will or retrenchment a real possibility in
to the second smallest debt. Repeat
cushion you and your family against these economic times. An emergency
until all your debts are paid in full.
unexpected short-term expenses that fund should be easily accessible and
may come your way. A savings plan, not subject to long notice periods. Remember, debt is the most expensive
such as Money Builder account from thing you can buy. Customers who require
Absa or an Absa 32-Day Notice Deposit assistance in managing their debt
Contro your debt
account will enable you to deal with the Its pointlessto save
if you pay more on
can call Absas Debt Repair Line on
sudden need for a new school uniform interest on your debts than the interest 0861 227 353.
or replacing a broken kitchen applianc?. that you receive on your savings or investment
accounts. Having a debt management Reward yourself by saving
Alternatively
your savings can be used plan is essential and the first Once youve got a budget and found
to pay accounts that come along periodically, thing you should do is draw up a budget some extra money by cutting unnecessary
like your TV licence or school to see where your expenses are, where expenses, save it. If you can save
fees. A slightly longer term saving plan you can save and how quickly you can at least 10% of your net salary, you will
such as Target Save account from Absa pay off your debt. be prepared for any eventuality. The
will help save for a holiday or to buy
best way is to have the money automatically
something that you really need by saving
deducted from your account at the
for an extended period of time.
The time to beginning of the month that way you
When comes long-term planning, wont accidentallyspend you get
it to
save is now. a bonus save before you spend
it. If
good savings and investment products it it.
such as Unit Trusts and Retirement
If you need immediate results to keep
WITNESS (Durban)
Wednesday, 29 July 2009, p. 9
Teaching your children to save
Teach Children To Save was launched in South Africa on 25
July 2008 in Diepsloot, Gauteng. This campaign, based on
one started by the American BankersÒ Association, is targeted -
at Grades 4 to 7 and aims to teach learners basic financial
literacy.
AbsaÒs participation
In 2008 Absa reached more learners than any other participating
financial institution.24466 students were educated by 270
bank staff who volunteered to teach a class. A generic toolkit
was developed covering the basic concepts of saving, budgeting
as well as the difference between needs and wants. Each
learner was given a money box and a leaflet on savings tips.
Teach Children To Save in 2009
Absa developed material that is aligned to the Department of
Education curriculum for Grades 4-7. During Employee Volunteer
Week 156 305 learners were taught by 3 682 Absa staff.
Teach Children To Save was launched on 22 July at a school in
Rustenburg, North West, the province with the least participating
schools in 2008.
In addition to Teach Children To Save campaign, Absa has
the
encouraged to collect books that were donated to the
its staff
participatingschools. These books will be used to ÑstartÔ libraries
in the schools and encourage literacyamongst the children.
To make sure your children have every opportunity available
them, you should start to save for their education.
to
You can do this by opening a FuturePlan account from
Absa. This account allows you, and anyone else, to contribute
to your childÒs education. You can open this account
with only RIOO and only need to put in a minimum of
R100 every month. Absa also contributes to your savings
by means of an additional3.5% interest on deposits up to
RI 000 per month.
For more information about how you can start saving for
your childÒs future, visit an Absa branch, www.absa.co.za
or call us on 0860 III 515.
WITNESS (Durban)
Wednesday, 29 July 2009, p. 9
The rule o112
If you want to find out how fast your savings will double Ù apply the
Rule of 72 and youÒll have the answer. If you want to see how many
years it will take you to double your money Ù just divide 72 by the
interest rate you expect to earn.
For example 72 ý 6% = 12 years.
If you want to find out what interest rate you need to earn if you
want your money to double by a specific year, then divide 72 by the
number of years.
e.g. you need your money to double in 8 years, so the sum is:
72 ý 8 [ = 9%
Therefore you need an interest rate of 9% in order for you to reach
your target.
WITNESS (Durban)
Wednesday, 29 July 2009, p. 9
The Rule of 72 approximates the number
of years it takes to double your money.
72 ý 3% interest 24years
72 ý 6% interest 12 years
72ý12% interest
WITNESS (Durban)
Wednesday, 29 July 2009, p. 9
Compound interest the 8th wonder of the world
Albert Einstein said, ÓThe most powerful force in the
For example, if you invest Ri 000 and get 5%
universe is compound
interest.Ô High praise indeed,
annual return on your interest,at the end of the first
especially coming from a genius.
year youÒll have Ri 050 (Ri 000 investment plus R50
HereÒs how t works interest). The next year you will receive 5% but now it
Ifyou start saving today, you will start earning interest will be on Ri 050 instead of Ri 000. At the end of the
immediately. Next month your savings will be more second year youÒll have a total of Ri i 02.50 (the interest
and you will even start earning interest on the interest now being R5550). Now imagine the snowball
every month. effect of this over 40 years.
_______
The power of compound interest
R200 Monthly Savings for 35 Years (age 30 - 65)
3% interest R148 680
6% interest R286 370
12% interest R 3 Million
Wednesday, 29 July 2009, p. 9
WITNESS (Durban)
WITNESS (Durban)
Wednesday, 29 July 2009, p. 9
How to save on your credit card
Õ Choose the credit card with the interest rate and usage benefits
that suits your financial situation. Our consultants will advise
Bank Õ
you on
By paying the
which card
charges on your credit card.
full
smarter
will be the best for your needs.
amount every month youÒll avoid any finance
and save a
How to save on your home oan
Õ Try to pay-off all other short-term debts prior to buying new
property so you can put any extra cash into your bond.
Remember, your bond is your cheapest form of debt.
Õ If you can, increase your monthly bond instalments.
Õ Pay any bonuses or lump sums into your bond.
Õ DonÒt lower your home loan if the rates drop.
Õ Interest rates vary, so try and fix your rate at the lowest rate.
Õ Switching your home loan from one bank to another can cost
you money.
Whether youÒre a first-time buyer or looking to upgrade, Home
Loans from Absa has the loan to suit you. Call 0860 111 007.
as some assets, e.g vehicles, will lose value while homes
generallyincreasein value and you donÒt want to be under-insured.
Compare quotes from different insurers and make sure that the
quotes reflectwhat you want to ensure.
Ask for discounts Ù some insurersreward no-claim behaviour.
Contact an Absa Insurance Advisor at your nearest Absa branch.
How to save on vehide finance
Make sure the car you buy suits your needs regarding
luggage/gear.
passengers, distances,
o
Make sure you sell your old car at the best price. The more you
get, the bigger the deposit, the less you will pay on the new car.
Õ You can save by buying a used car from a reputable dealer.
When you are budgeting to see how much you can afford, donÒt
forget to factor in insurance, maintenance and servicingcosts,
Õ Shop around and negotiatethe best price with a dealer.
Õ Decide whether you should buy or lease. Choose the best deal
for your life stage and circumstances.
Õ Negotiate a good deal and arrange for a residual value which will
lower the monthly instalmentof your car finance.
When comes
to saving on finance costs, fees and charges the
it
good you can. Whether itÒs using the right ATM or
news is, researching
the best place for a home loan, if you take the time to
find the right product that suits your banking requirements, it can be
done. And Absa will help you find the right mix that suits your needs.
How to save on banking costs
Õ Use your bankÒs ATMs - you will pay more at other banksÒ ATMs.
Õ ItÒs cheaper to draw one large amount of cash than many smaller
ones.
Õ Make sure you have enough money in your account when your
debit orders go through.
Õ Always check your bank statements.
Õ Choose the account that suits your banking requirements.
Õ Use your debit and credit card instead of cheques and cash.
Wednesday, 29 July 2009, p. 9
Õ Remember, itÒs cheaper to do banking at an ATM or through
Internet, Telephone or Cellphone Banking.
How to save on insurance costs
Know the current replacement costs of your home, vehicles or
WITNESS (Durban)
Õ
home content Sb assets are insured at the correct amount.
Õ Update your insurance policies with the most recent valuations
