Save for rainy days, says banker

By ZEBEDEE GIAME
DISCIPLINING yourself to save money for a “rainy day” is very important because by saving money you are able to build wealth using saved money as collateral, a banker says.
Nasfund Contributors Savings and Loans (NCSL) member services and branch support manager Noel Keyala said most working people in the country were focused on living in the now.
“Working people in PNG have accepted that living off their income is the way to go,” he said.
Keyala said most people in the country did not know that it was financially prudent to save money to increase their wealth so that they had money to live off after they left formal employment.
He said there were many financial products that were customised and targeted at the average income earner.
“People still fail to appreciate that most of the savings products that are offered by financial institutions were ‘zero-rated’,” he said.
Keyala said 80 per cent of the after tax income were usually paid to the employees’ savings and loans institution to manage.
“This means the employers only administers the remaining 20 per cent of the income after tax to support the processing of these moneys,” he explained.
Keyala said that meant that all the money that was saved accrued an interest that could act as security for loans.
“The bigger your savings, the more options you have in terms of the different loan ratios you will be eligible for,” he said.
Keyala said this could assist the employee to apply for bigger loans to help them create a side business while they were formally employed which would generate more income to pay off the loans and become self-sustaining.
“In this way, we create more small businesses that provided employment for the undereducated and unskilled workforce in this country,” he said.