A clear-cut approach to a better financial position

Clear all debts before saving.

12:34 17 December 2014

It is important that you clear all your debts before engaging yourself in a savings plan. It is of no help saving while you are still borrowing. With mortgage rates soaring through the roof, and inflation touching unprecedented levels, it is nerve-racking to have a savings account. However, savings should be a top priority task for any person, and saving without taking loans is a must do for all. 

 

Here are some of the ways to ensure that you save healthily and that is saving without getting into debts.

 

The first thing you have to work on is reducing your loan deficit. Accumulating debts for a long period will only cost you more since you will have to pay more interest over that period. So pay them off and ensure that you are able to run on your income without depending on any more loans. 

 

Similarly, do not make your debts a reason not to save. Most people will pay off a debt and take up another debt saying they cannot survive without it. However, with proper fund management and assistance from a competent financial advisor, you will be able to make good use of your income to make provision for a part of your loan and the other for domestic use.

 

Make sure you have some emergency cash stashed away in a separate account. This really helps in preventing you taking another huge loan when you need urgent cash. You can rely on this money over taking a loan and this will see faster clearing of existing debts and going ahead with implementing your savings plan. 

 

Ensure that you put your savings in an account that you cannot access easily. This helps in making you more reliable in only spending on your income and letting your money grow safely in a savings account. Over time, you will find it easy to rely on a part of your income as you save the rest.