Fostering a culture of saving
ACHIEVING financial goals requires hard work, saving, and disciplined habits, according to VM Group executives who recently highlighted the importance of financial literacy and consistent saving practices during the VM Group’s YouTube online series, Chatting with Courtney.
“The best time to start saving is now. It is not tomorrow; it is not ‘when I get a salary increase’ — it is now,” said Suzette Ramdanie-Linton, assistant vice-president of branch distribution at VM Group.
The COVID-19 pandemic underscored the value of having an emergency fund, which can cover unforeseen expenses such as medical emergencies, accidents, or temporary job losses. According to financial experts, it typically takes individuals at least three months to secure new employment after a job loss. Consequently, it is advised to save the equivalent of three months’ income as a minimum buffer.
“Consistent saving allows you to achieve an emergency fund,” she said. “It gives you peace of mind knowing you have financial backing.”
Financial success is not necessarily tied to income levels. Ramdanie-Linton explained that it’s not about how much you earn; it’s about how much you save, so conversely, the person earning $5 million annually but saving nothing is worse off than someone earning minimum wage and saving $2,000 or $3,000 weekly. Saving $2,000 weekly amounts to $104,000 annually. Consistency also helps avoid bad debt and build generational wealth. VM’s flagship savings product, the iSave suite, offers solutions designed for disciplined savers aiming to achieve financial goals. The strategy employed by VM Group to encourage its members to save involves advising them to treat savings as a non-negotiable monthly expense, similar to paying utility bills. This approach fosters regular saving habits. VM’s iSave product suite allows savers to choose their deposit amounts and tenure based on their financial capacity. Savers can also select their preferred currency, helping them mitigate the effects of Jamaican dollar devaluation.
“There is always the possibility of devaluation that will eat out your earnings,” she cautioned.
For those saving towards homeownership, VM’s iSave offers mortgage-related benefits, such as better interest rates for committed savers. The iSave long-term plan is tailored for goals like retirement planning or saving for major life events, such as renovations or vacations.
However, fostering a culture of saving begins in childhood. In sharing some techniques parents could apply to encourage saving habits in their children, Ramdanie-Linton zeroed in on her own practices after utilising the VM’s Save to Grow account, which designates the child as the primary account holder and the parent as a joint account holder, encouraging young savers.
“If children are getting lunch money, encourage them to save a little every week and deposit it into their account,” Ramdanie-Linton advised.
During the Christmas season, she suggested encouraging children to save cash gifts. To further motivate them, parents could match their savings or contribute half of their goal amount.
“Children want to buy specific things that I may not want to spend my money on. However, if they save for it, I might offer to pay 50 per cent of the cost,” she explained.
“It also helps them appreciate delayed gratification and sets the foundation for financial independence,” added Courtney Campbell, CEO of VM Group.
Children with active VM Save to Grow accounts are eligible to apply for VM Foundation scholarships and bursaries. This year, over 70 young individuals benefitted from the program, which aims to support educational pursuits.
