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PIA spells out ‘Better life through saving

FIRST National Bank head of marketing Clofilda Mulenga speaks during the institution’s 2nd annual card security briefing for preventing card fraud in Lusaka on Monday. PICTURE: CHANDA MWENYA

PIA FORUM with DOREEN KAMBANGANJI
FRIDAY, March 13 marks the start of this year’s Financial Literacy Week, an event which will provide a platform for engagement on financial literacy issues and concepts including saving, asset building, budgeting, risk management, consumer protection with the participation of financial institutions, regulators, other stakeholders and the public.
The Financial Literacy Week is running under the theme “A Better Life through Saving: Every Ngwee Counts” and is meant to help inculcate a culture of saving among Zambians.
What is saving?
Saving means putting aside money from what you earn today for future use. What you save is the difference between what you earn and what you spend. Therefore, saving is not difficult as everybody can save.
Why should you save?
Saving is important. When you save regularly, and over a long time, you accumulate money and earn interest, especially if the money is deposited in an interest earning account or financial product. Saving can also help you to achieve financial goals or protect you in case of an emergency. Remember, it is important to plan and think long-term of what you need, especially in the future.  For example, the money saved can help in meeting the following obligations:
• To pay for valuable things and achieve your financial goals, such as building a house, buying furniture for your house
• To guarantee the future of your children in terms of paying their school fees
• To be prepared for an emergency or future needs, such as sickness, death
• To build up a security for retirement
• To facilitate access to loans in a financial institution as it can be used as collateral or may even prevent the need for taking a loan; or
• To provide capital for starting a business.
Forms of Saving
Saving can be in real form, for example, stock or cattle or in financial form. You should not save money in the house under the pillow or in a tin buried in the garden because that is risky. Additionally, you should not gamble with your money – this is not saving. You need to save in a well-known financial institution that has been licensed by Bank of Zambia, the Securities and Exchange Commission or Pensions and Insurance Authority.  This is important because:
• These institutions are credible, trustworthy and they are managed by professionals.
• These institutions ensure confidentiality of clients’ dealings.
• Your money is safe and secure as it is protected against loss, theft and fire.
• The value of the money increases as interest is paid on it, if it is kept in an interest earning product.
Remember, there are other forms of savings plans that are less formal such as Rotating Savings Clubs or ‘Ichilimba’ as the schemes is known in Zambia and others that are considered safe.  However, you must always be on the lookout for illegal financial service providers like those engaging in ‘Kaloba’ or pyramid schemes.
Saving in the pensions and insurance market
Saving for your retirement is one of the most important financial plans you can make as it gives you financial freedom when you retire. You can choose to save in a pension scheme or a savings plan or both. The following are some of the savings possibilities in the pensions and insurance market:
• Save for your retirement through your employer pension scheme (if in formal employment)
• You can set up a pension plan with a licenced service provider
• You can buy an endowment policy or a school/college fees policy for your children or other dependents.
Saving in the capital market
For the capital market, basic advice is that you need to shop around with all available institutions in the securities market to identify products that best suit your needs. The following are some of the savings possibilities in the securities market:
• You can buy shares in on the stock market
• Invest in a collective investment scheme
• Invest in a bond.
Saving in a Bank
You could also save your money in a bank or any other licensed deposit taking financial institution. Ensure you shop around in all available institutions in your neighbourhood in order to identify the institutions and financial product which serves your best interest.
Record Keeping
Remember to stay in contact with the financial institution you save with and keep a record of your savings so that you are clear at all times about how much you have saved, the interest or dividend you are likely to earn and what you are able to spend.
You are all welcome to participate in the Financial Literacy Week activities that will take place in the provincial centres in all the 10 provinces starting with the exhibition that will take place in Lusaka from March 14-15 at Manda Hill.
Your feedback is always welcome. Get in touch with us through email: pia@pia.org.zm or you can visit our website www.pia.org.zm for more information






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