Following the Covid-19 pandemic, one of the most important lessons in 2020 is how our day-to-day lives can change in an instant. The lockdowns implemented to curb the spread of the pandemic resulted in high levels of economic, political and social uncertainty that we are starting to recover from. One particular area of concern for most households over this period has been financial stability. While circumstances vary across households, many ordinary families have presumably been left financially worse-off following Covid-19 which was characterised by strain on personal incomes, increase in unforeseen expenses, decline in savings and in some circumstances as well as an increase in personal debt. Crisis can take many shapes and forms and planning for the future can indeed seem a daunting task in this uncertain environment. Ultimately, it is the decisions that we make today – from the lessons that we have learned so far – that will have a bearing on how well we shall navigate the next emergency or major event in our personal lives, and enable us to do so without subjecting ourselves to financial stress. One decision to consider is the establishment of a “savings nest-egg” that acts as an emergency fund, or that is tied to a personal financial goal such as saving towards the purchase of a new car, a deposit for a new home, a wedding, or overseas vacation, children’s education or even retirement. If any of these goals resonate with you and form part of your future plan, then you should definitely consider investing these savings in BK Capital’s newly launched Aguka Unit Trust Fund! The Aguka Unit Trust Fund is a safe and Capital Markets Authority regulated investment vehicle where investors can save their cash and earn investment rates that are higher than what they would get in a typical savings account, while having access to their cash within 48 hours of making such a request to redeem it. The Fund carries low investment risk and is designed to preserve capital, while paying out distributions or interest to the investor twice a year – basically, the investor may choose to either reinvest the interest income back into the fund, thus compounding the growth on their capital investment, or opt to take the interest income out to meet other expenses, while their capital investment remains untouched in the Fund. This creates a fantastic opportunity to not only build your savings nest-egg, but to also let your savings work for you. It is never too late to start saving or to rebuild your savings back up again. Even small amounts of regular contributions into the fund can go a long way and make a huge difference in your financial situation, in essence securing your tomorrow while allowing you to live your today. Below, I will share a few tips that could be of help as you start on your post-Covid-19 savings plan with the Aguka Unit Trust Fund: Separate your ‘essential’ & ‘non-essential’ expenses Go through a list of your monthly expenses and separate the costs that are essential for your survival “basic needs”, from those that are discretionary “extra wants” which you can do without. You can create more opportunities to save by stripping out the extras from your monthly expenses and investing that cash to earn returns at a good rare Create an emergency fund Build a savings nest egg over time that can potentially cover between 3-6 months of your living expenses. This might seem a difficult task to begin with, but is doable with self-discipline and commitment to making regular contributions toward this goal Re-align your financial goals Make a priority list of the goals in your immediate future e.g. children’s education, wedding, vacation, car purchase, etc. Be as realistic as possible, and attach timelines for achieving this so you know how much extra you need to save on a monthly basis to help you reach your near-term targets As the saying goes, starting is the hardest part. The key to ensuring discipline, even when progress may seem slow-moving, is to ultimately remember why you are saving and in the words of Desmond Tutu, remember that there is only one way to eat an elephant: a bite at a time. The writer is the Managing Director of BK Capital.
