Save Now, Spend Later. How To Develop a Sound Personal Economy.

Money is a commodity. It is something you earn, and should be valued, as it represents the sum of your labor and energy. It is not a recipe for happiness, but it may be the cause of great distress.



The culture of money-management is something you learn from your family, whether you realize this or not. But how you carry these lessons forward into adulthood should be a matter of conscious choice, or you may simply end up repeating patterns of money mismanagement.

It is no secret that in a materialistic world of instant gratification, issues around money, for rich and poor alike, are at the root of many serious problems.



Ideally, you should begin saving some part of the money you receive as a child. Unpopular as it may be at the time, the value of thrift is something children will appreciate once they are responsible for their own financial well-being.

As soon as you start earning your first salary as an adult, you should prioritize saving. Formalize your saving by investing in unit trusts, Exchange Traded Funds, and tax-free investments. Establishing a habit of saving when you are young will enable you to support the life you aspire to in the future.  Many financial institutions offer advice on financial planning and management free of charge to account holders. The important thing is to get going as early as possible, so that saving becomes part of what you do with your money.

Include a percentage of salary increases and windfalls such as inheritances in your long-term financial plan.

Pay off your debt as soon as possible. Crippling interest rates are the enemy of successful saving, so try to pay off home and car loans before their lending terms expire.



You may think of credit as additional money, but the ease of obtaining and using multiple credit cards can quickly burden you with huge debts. If this is your situation, cut up the credit cards and consult a financial advisor who will help you to formulate a plan to pay off what you owe.



Virtually everyone is obliged to live according to some sort of budget. The difficulty is learning to stick to the budget that you have drawn up. Identifying clear goals may help you to spend your money wisely.

*          Conduct a financial audit over a few months so that you know exactly how and where your money goes. If you spend more than you earn, identify areas where you can economize.

*          Allocate your money under different headings covering your responsibilities, such as  accommodation, utility bills, transport, insurances and contributions to pension schemes.

*          Separate food categories so that you know how much you spend on take-aways and eating out.

*          Scrupulously record what you spend on non-essential items, such as clothing and entertainment.

*          Include a column for long-term savings.

*          Create an emergency fund to tide you over for a few months if you lose your job, or require some costly but necessary treatment.

*          Also allocate some money for holidays and entertainment.



If your lifestyle does not match your resources, live in a smaller home, drive a more economical car, eat in more than you eat out and you will feel far less stressed!

*          Pool your resources with colleagues and friends, by sharing transport, and buying in bulk to take advantage of discounts.

*          Create a dinner club with a group of friends, and eat at each other’s homes instead of in restaurants, where food is often disappointing and over-priced.

*          Have a bring-your-own-drinks policy among your friends.

*          Hire or borrow clothes for special occasions rather than splashing out on pricey, seldom-worn outfits.

*          Teach your children that treats are special, and not obligatory add-ons to the supermarket bill.

*          Club together to buy birthday gifts for mutual friends.

*          Re-purpose rather than buying new items; this is not only practical, but also environmentally responsible.

*          Swap homes with friends living in a different environment for a free holiday.


In the Charles Dickens novel David Copperfield, his most unthrifty character Mr Micawber comments:

Annual income twenty pounds, annual expenditure nineteen nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.