Save now for the future

PUBLISHED : Monday, 26 November, 2007, 12:00am
UPDATED : Monday, 26 November, 2007, 12:00am

Your favourite clothing shop is having a sale!

All items are being offered at a 20 to 30 per cent discount.

You buy a few shirts and trousers and rush home to your calculator to find out that you saved $560.

But are you sure you really saved money?

What you have done is spent money buying these clothes. Would you have bought them had there not been a sale?

So you did not really save any money, right? You actually economised.

Saving is keeping money aside, while economising is getting better deals when you spend.

Saving is usually less fun than spending, but saving is fundamental in managing your money well.

You need to save first for your future expenses, whether it's for your phone bill or your tax.

Future expenses can be short term (bills) or long term (people usually save to buy a house, or for their retirement).

Saving is also the best way to avoid debts: if you keep enough money aside for expenses to come, you will not have to ask for a loan in case you run out of money.

So the next time you plan to make a big purchase, don't nag your parents. Ask your grandparents for help, or pay by monthly instalment.