Be money smart
BARBADIANS are being urged to think carefully about which financial institutions they can entrust their hard-earned dollars to and to instil the importance of saving and investing in the minds of our young people.
This advice comes from Terry Bonnett, Finance Manager at Capita Financial, who says at a time when banking institutions are continuously decreasing their saving rates, other institutions are offering Barbadians greater bang for their buck. He noted that Capita, for example, is offering a savings rate beginning at 1.75 per cent for three months and the rate increases. “So the longer you have the deposit for, the higher the rate,” he said, saying this way Barbadians are given a chance to see a greater return on their savings.
He said this is part of the company’s mandate to challenge itself to offer more to customers, not only in their savings but health plans and insurance brokerage to offer the best prices on premiums.
Bonnett noted that over the years there have been some anecdotal changes in society as it relates to saving. He noted that with the “meeting turn”, which was a major part of society and still is in some quarters, persons showed tremendous discipline in order to save toward what they wanted. Today, he lamented, that culture has in many ways morphed into a need for instant gratification with one’s discretionary expenditure.
“You want the latest phone, even though your phone is one year old and the new features are minuscule. You want the new television because it is curved... those types of things. If we start to do that, then we can see how we can’t factor in wealth generation. That is where the particular problem is – we are an instant gratification society. We want this now and that now, but we are not thinking about how we are growing wealth.”
Bonnett told The Barbados Advocate that there is a need to get into secondary, tertiary and even primary schools to teach students at an early age how to save their money and to reach their goals in the future.
“If you want to own a car, it is better that you start saving because the more you save, the less you borrow. The less you borrow, the more disposable income you have, the less interest you will be paying. So we need to teach people to set goals in order to build their wealth.”
The financial manager went a step further by stating that money management should be on the standard curriculum, lamenting that while some cultures teach children how to manage money, many parents appear to be teaching children how to spend money.
“There is no reason why a primary school child needs a $300 bag to go to school. That $300 should be best placed in an account. They are going to want the $300 next year anyway because they are going to say they had that bag last year. We need to teach our people how not to spend so recklessly. How to spend on the essentials and not something that is desirable,” he said. (JH)