SUNBIZ

Basic Banking and Budgeting

Financial Literacy is one of the first steps on the road to economic strength and experience. To be able to manage our own personal fi­nances and savings has an incredible
17 Mar 2018 11:00
Basic Banking and Budgeting
Shoran Devi

Financial Literacy is one of the first steps on the road to economic strength and experience.

To be able to manage our own personal fi­nances and savings has an incredible effect on our quality of life.

Enabling the people of Fiji to make in­formed financial decisions with easily under­stood information is rewarding.

Financial Institutions in Fiji are always de­lighted to help educate the public on money matters and support the growth of financial education in Fiji.

The public gets to understand the costs as­sociated with financial decisions and the savings required to reach their goals when recognising the need for financial tools and information that are readily available.

Our values calls us not only to look for shrewd financial products and services, but also to look at all the ways we can build our wealth and well-being.

Financial institutions have developed a number of initiatives and continue to work with community partners to provide pro­grams for both individuals, businesses and organisations.

Our financial well-being depends on our ability to understand and use financial in­formation in a way that helps us make good decisions.

There are tools and accesses designed and available to assist people of all ages to get the information needed.

Bringing about positive behavioral changes towards personal financial management, is a lifelong, ongoing process that can be an overwhelming experience, with the different types of financial products and services that are out there.

Basic Banking

Saving money is crucial to an individual’s overall financial strength.

There are lots of good reasons to save mon­ey – for a vacation, education, your home, a comfortable retirement, medical or for a rainy day.

When our housing costs and utility bills are high, however, there often is not that much left at the end of the month.

There are a number of options to help people save, even if it’s just a little bit each month.

You’ll be surprised how quickly it adds up. Access to basic financial services – like a bank account or cheque cashing – is some­thing most of us take for granted.

But many individuals don’t have easy and affordable access to these essential services.

Many low-income earners resort to cheque cashing in companies that charge excessive fees just to access their money.

Most of the financial institutions-banks, offer salary accounts and at the same time offer savings accounts to the workforce and encourage them to authorise automated transfer from their salary account into their savings account on a weekly/fortnightly ba­sis. Customers are often attracted to open­ing such savings accounts as they offer good interest returns.

And also, with the automated trans­fer authorised by account holders, they do not have to worry about lining up in a queue to deposit their savings.

Simple Budgeting

In an economy where wages are stagnating and expenses keep mounting, let’s not sug­arcoat it: it’s getting tougher to live the life we dream of however modest or grand that might be.

But that does not mean that we should feel that our dreams are out of reach.

It just means that we need to be smarter about how we manage our money, and the first step—just like with any new fitness re­gime—is to break ourselves of old, unhealthy habits and establish new ones that will get us into financial shape.

Most of us think of a household budget as just a tool to help us save or to cut expens­es, but it can be much more than that. Done right, our budget can become a blueprint for achieving any number of goals.

Before making our budget, take the time to truly consider our priorities.

Is it avoiding credit card debt or paying off our line of credit?

Setting aside a down payment for our own home, sending our kids to school or paying off our mortgage early?

Maybe our personal finances are in good shape, and we’d really like to contribute more to organisations doing good work in your community, say, fighting homelessness or protecting a marine habitat.

Deciding on our goals is the first step to­ward making a plan to achieve them.

Before it can achieve anything, however, our budget must be grounded in real numbers.

That’s where many of us go wrong.

The problem is our expenses. Most of us don’t know what they really are.

Some of us, if we are honest, do not want to track our expenses because we know what they will show and we will have some tough choices to make.

There are a couple of good ways to handle this. One is to track every purchase we make over a one-week period.

This is a bit of a chore, but it’s also the only way to get a true picture of where our money is disappearing to.

The second is to take the time to list all of our annual expenses—car insurance, the property rates, etc.—and include them as a monthly cost.

Whatever our goals, setting up automatic monthly or bi-weekly payments is a smart way to go.

This could mean payments toward out­standing debts, or any other life goal that comes with a price tag.

Some people also make automatic weekly/fortnightly/monthly transfers to an account they have set up for annual expenses, ensur­ing the money is there when their bills come due.

No matter what you plan on using your money for, automating the transfers or pay­ments to align with your pay cheques will en­sure that money goes toward your priorities.

You can leave the more flex­ible goals to your self-discipline.

Managing debts

Many low-income individuals don’t have ac­cess to traditional forms of credit.

Getting credit without a credit history or with a poor credit history, can be a challenge. A small loan – based on the character of the borrower and the strength of the case for a loan – is a good way to begin building a solid credit history.

All financial institutions have dedicated staff who understand the unique challenges faced by individuals, and will provide you with custom financing solutions that are right for you.

Most of us have debts—and some of us have a lot of it.

If you are one of the many, paying down debt will likely be a high priority, and paying more than your monthly minimums is an ab­solute must.

Of course, this isn’t always easy, and it might mean cutting back in other areas or seeking new ways to generate income.

Remember though, that even small amounts add up over time, and taking a step in the right direction now is the only way to move toward a debtfree future.

Just as the benefits of exercise amount to more than just subtracting a 20 from the number on the scale, saving “X” amount of money can mean more to your life and your community than just a number in a budget.

Remembering our dreams and goals—the real potential value of the money we save—can be a great motivator to stick with good financial habits.

Let your dreams be a motivator

No matter where you are in life, having the right financial information and support can help you meet your personal goals and im­prove your quality of life.

If you need some advice about the basics like opening an account, learning how to budget, and improving your credit, financial institutions and their expert staff are there to help you put your money to good to benefit you, your family and your community.

Your finances should support your needs and goals

Feedback: maraia.vula@fijisun.com.fj

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