Ready for that rainy day?

By Vidushi Seneviratne

"Money, money, money/ Always sunny/ In the rich man's world," as ABBA puts it quite aptly, let’s face it – whatever you may call it – money, cash, dough – it does help the world go round! And especially when you're a vibrant young person, with places to go, things to do, the latest clothes or level of play station to buy, millions of dreams to realise; of course while taking on life's limitless possibilities...

Pic by M. A. Pushpa Kumara

But unfortunately, doesn't it seem like you never have enough? Aren't you, more often than not, wondering where all your money's gone, whenever you need it? Almost like you've got a big gaping hole in your pocket! But did you ever stop to wonder that it's probably not just that the cost of living has risen, or that the allowance your parents give you isn't too great, or that you don't get paid enough? The problem could quite simply be that you're not saving enough, or just not going about it the right way!

But fear not, with a little organised saving and cash management, you would be surprised to see just how much you could do with the money you have at hand. It would allow you to pay for your own dinner every time you meet up with your friends, buy your first ever mobile phone, pay for that graphic design course you've always wanted to do, or finally take that trip to Singapore and have the time of your life. But more than everything else, it would leave you with a sense of independence and maturity, which gives you that extra edge, and a feeling of satisfaction that you're finally ready to enter the adult world.

For Nilara (23), saving money is a definite yes. "Young people, entertainment-wise, have way more expenses now – trips, dinners, lunches, partying, coffee! So it's hard to save. But it's a good thing at the end of the day, if you can manage to do some saving.

With our generation, it's more often than not, about feeling good for the moment, rather than long term. It hit me around the beginning of last year that it will be good to have something to fall back on, you know just in case, for an emergency. It's all about "security," and just knowing that if there's a medical emergency, or you need money for a down payment for a vehicle, or even to take a trip overseas, you wouldn't have to depend on, or burden your parents. I see it as a part of growing up I guess!"
Joel (19) thinks that it's a good thing if young people could save. "I guess they should. And I don't think there's an age as such for you to start. But obviously it would make more sense to start when you start earning. I save a bit, whenever I can. And I had saved up quite a lot, but towards the end of the year, I busted up most of it! As for my future, I want to have a certain amount in the bank, by the time I decide to get married. After all, that's when you would need to be most independent.

I have just started working, and I plan on getting a bank account soon, where I know that I'll be saving for a greater purpose. Right now, I depend on my parents for everything – food, transport, even hair cuts! But when I do save, I will have that guarantee that I will have a set amount for my future. As Maya (22), puts it, "Saving is a good habit. Because as material and self obsessed as it sounds, you need money for everything! And it's always good to have something to fall back on, especially when you retire.

As for me, I have two accounts – one is for my salary and there's the other one, where I deposit money for my life savings. From the account where I put my salary, I have made an arrangement for a certain amount to be transferred into the other account, which I don't touch. In my opinion, you are never too young to start saving. I was around 12 years old when my mum first got me a bank account, piggy bank and all! I of course used to get annoyed with her, when she used to insist that I save, but now I realise what a good practice it is!

So whether it's in your piggy bank, or in a little box lodged somewhere in your drawer, or more wisely in a bank account, get into the habit of saving.

Though it seems like a tedious and disciplinary process at first, once you get the hang of it, it's just a breeze. And after all, why should you deprive yourself of that latest laptop, or that trip to Singapore… and of course a comfortable and secure future?

Guidelines on saving

To give you some guidelines and tips on why you should save, and how exactly you could go about it, we spoke to a few experts in the field of banking.

Rienzie Martinesz, Head of Marketing, HSBC had this to say:

1. Should young people save?
"Yes, we all should, as it will come very much in handy on a rainy day. But not just for emergencies, we should plan and save for the future. Saving money may not be as much fun as spending it, but it is very important that you do it.
Managing our finances is something many of us have never learned how to do, but it's not nearly as scary as you think it is, and once you get started, managing your money will become the best habit you've ever had."

2. What's the ideal age to start saving?
"There is no specific age. The more you understand how to save and manage money the more likely you are to make some smart decisions about the future."

3. Any tips on cash management?
"Young people are becoming more responsible in handling money and making decisions, from small everyday purchases to bigger items (for example a bike or a camera), to saving for higher education."
"Here are a few simple tips to manage your money:
*Spend money wisely
*Decide where to keep your money (maybe a piggy bank or an actual bank account – of the two a bank account is always better because not only do you save but you earn interest on it as well)
" Budget and set goals for yourself. For example: "By the end of this year I am going to collect money and have enough to buy a digital camera."
Try not to borrow money. If you do, have a plan beforehand as to how you will pay back
Get help from adults, teachers and other sources."

4. Is there a culture or mentality of young people saving in Sri Lanka right now? Or should it be improved?
"It definitely needs to be improved. The present day scenario is for parents/guardians to save for their children, but we do not find many children making a serious commitment. Think of all you will be able to do when you are grown up if you have saved a nest egg for yourself! Remember the rule is to plan ahead and set goals for yourself."

5.What are the Bank schemes on offer for young people?
"In addition to the higher interest rates (which stand at 11% at present) offered on the HSBC Children's savings accounts, we offer our young customers the following benefits:
-Special gift vouchers from Vijitha Yapa on your birthday (based on the balance in the account), which will help you purchase all the books you need.
-25% bonus interest on the month of your birthday
-Be eligible for a computer loan after your 10th birthday (25% more than the balance in the account, up to a maximum of 100,000/-)
-An ATM card after your 12th birthday, which will give you access to your account to make deposits and perform balance inquiries
-Free life insurance cover of 100,000/- for a parent of guardian if the balance in the account is over 20,000/-"
"Also, with HSBC you have a window to the world, which will help you explore a range of global opportunities when you reach adulthood and are ready to make a serious decision about your future."

This was the opinion of Irosha Degamboda, Brand Manager, Commercial Bank:

1. Should young people save?
"Yes, with the growing economy, young people should definitely save. It could be for transport, food, education, consumer goods or leisure activities. Young people are getting more and more independent, in contrast to when we were growing up."

2. What's the ideal age to start saving?
"There is no particular age to start. Even a five -year-old for that matter could save! Parents and teachers should encourage them to start saving from a young age. But after they reach around 18 years, they will be better equipped to save on a serious level."

3. Is there a culture or mentality of young people saving in Sri Lanka right now? Or should it be improved?
"Yes, it should definitely be improved, but Sri Lankan kids are more biased towards saving their money, in comparison to kids in Western countries, who are more into spending money on having a good time.
Our kids have more of an interest in and value education and so on. But with time, consumerism and materialistic aspects in life is becoming quite important here as well, so young people should start thinking more about saving."

4. What are the most important areas in life that young people should be saving for?
"About 50% should be for education. But it's important to receive a good exposure to the rest of life as well. This would make you confident and independent. Your lifestyle should be balanced, so saving for both your education as well as leisure is important."

5.What are the Bank schemes on offer for young people?
"We have the Dot Com Teens Savings Account, which is an exclusive account for young people between the ages of 13-18. And for young people over 18 years of age, we also have power savings schemes, where if you are earning, you could invest money with us.
You could also benefit by saving for three months and having your interest double. The Com Leap scheme, which has a very high interest rate, is ideal for young people around the ages of 24 or 25."