Saving 101
Strategies to create a financial safety net
3 minutes
Simple steps can make a big difference for your future financial security
1. Setting a savings goal
It is important to have a goal to motivate you to change your money management habits.
Ask yourself about what reason that you would like to save for.
This can be different for each person:
​
-
Future travel plans
​
-
Apartment purchase
​
-
Emergency fund
2. Tracking & Budgeting
First, understand where your money comes and goes. Keeping a track of this will help you examine your behavior and see where you can make some changes.
​
Then, take another step forward to forecast your monthly ins and outs by creating a budget. This will help you stay on course for achieving your goals and make changes where necessary.
3. Separate accounts for different purposes
Using a single bank account for both transactions and savings can be a recipe for disaster; it becomes easier to unknowingly spend all your money.
Shop around for the best offerings on savings accounts across the Banks in the Maldives to find something that suits your lifestyle. There are savings accounts that generate interest for you on a monthly basis or semi-annually while others will simply safeguard your money without any interest. Visit their website and search for the “Fees & Charges” (some Banks refer to this as “Schedule of Charges” or “Tariffs”) and see which one can work for you.
Pro Tip!
Consider opening an account in another Bank than your primary banker or avoid taking a debit card. Not only would you save on annual charges, but it makes it difficult to withdraw when the urge to comes and you’ll reach your goals more quickly.
4. Repay loan debt
​
Counter-intuitive? Not particularly.
If you find yourself with some extra money by the end of the month, rather than just transferring it to your savings account, repaying a larger portion of your loan can help you save in the long run as the total interest payable reduces.
5. Changing habits
​
This is possibly the hardest thing to do but the trick is to start with something simple.
The ideas below may help:
-
Quit smoking – unpopular opinion, yes, but a smoker who goes through two packs at MVR 75/- per month can save nearly MVR 10,000 in five years.
-
Lunch at home – if you eat out for five days of the week during work, you’re likely to spend MVR 2,000 per month. Instead, packing the leftovers from the night before or cooking in bulk at home can help you save tons.
-
Portion sizes – particularly for beverages, when buying takeaway coffee, ask yourself if you really need the largest (and most expensive) cup. By the time you have the last sip, you’re already sick of it or have thrown it away anyway.
6. Other ideas on how to save
​
Today, technology can help you become strengthen your self-control (what a time to be alive!). You can consider automatically saving a set amount by setting up a recurring (repeating) transaction. See your Banker or play around with your internet banking application to arrange this.
You may also consider the good old piggy bank for loose change. Whenever you get your change back in coins, save some weight on your wallet and just put it in a container. You would be surprised how much you have saved over a year.
Wanna learn how long it would take you to reach your goals?
Use our Savings Goal Tracker here: