Financial Literacy for Everyone

Why you should save money

Saving money is one of the best habits you can learn as you grow up. Saving money will allow you to:

  • Meet a very specific short term or medium term goal (for example, buying a new soccer ball or a cellphone);
  • Be ready for unexpected expenses (for example, an accident, illness, fire or theft); and
  • Plan for a long term goal. Examples are: saving for further studies, starting your own business, buying a car or saving money for when you stop working (also called "to retire").

Life goals

We all have goals in life that we want to achieve. Sometimes these goals are not very specific, like "I want to be rich" or "I want to be happy". Sometimes they are very concrete, such as "I want to pass my Matric with an A symbol in Mathematics". Goals that are very clear and specific are easier to achieve. Goals need to be practical and realistic: if you never do your Mathematics homework, you can dream about getting an A symbol, but you will probably not achieve it.

We have goals that relate to different periods. Some goals, like "a new pair of shoes" you hope to achieve within six months; others you want to achieve over a longer period, such as "becoming a doctor", "getting married and having children" or "buying a house".

You can have goals you want to achieve in a few months' time. These are called short term goals. Other goals might take years. These are called long term goals.

Short term means something you want to achieve within the next two years.

Medium term means something you want to achieve within three to five years.

Long term means something that will take five to 30 years to achieve.

The following example explains Zanele's short and long term goals:

Zanele's short term goal is to be able to buy presents for her family on their birthdays and to have money for the things she wants. These include buying a R20 scarf for her aunt, a R10 jigsaw puzzle for her cousin and a R25 sewing kit for herself.

Zanele's long term goal is to go to university.