Kevin Hanna, Manager of the Treasury Department at BOB (Bank of The Bahamas Limited) recently urged youth at a national Junior Achievement Conference at St. Anne’s School to resist the temptation to buy things they don’t need and instead focus on developing sound budgeting and savings habits for the future.

Mr. Hanna said financial discipline is critical to future success in life. “If you do not have sound personal budgeting strategies and financial discipline, you will always be in debt and you will always be unable to properly manage your money,” Mr. Hanna said.

On the other hand he explained that budgeting and saving will ensure that funds are available when needed for achieving important goals like paying for a college education, buying a home or starting a business.

“If you want to start a business you need more than just a good idea. You need to have some capital saved as well,” Mr. Hanna said.

According to Mr. Hanna Standard and Poors (S&P) has termed The Bahamas’ national savings rate as “stubbornly low” and at May 2012 The Bahamas’ rate was just 10% of GDP compared with some Asian nations at above 20% of GDP.

He said that on average Bahamians save just 8 cents out of every dollar and suggested that one reason why our savings rate is so low is that we are driven by the power of advertising to buy things we don’t need and spend money to “look good” rather than saving to create wealth like some other nations do.

“We spend our money on some interesting things like designer clothes and Brazillian Remy. Most of you have a smart phone but as a teenager do you really need a smart phone? Maybe what you need is a bubbla,” Mr. Hanna said.

Mr. Hanna told the Junior Achievers that the earlier they start saving the better it will be for them and outlined a number of savings strategies such as eating breakfast at home, using a free texting application, setting aside $10 a week from their allowance and lunch money and taking lunch from home instead of buying lunch.

“Everyone should have a savings account, whether at BOB or another financial institution…you should treat savings like a bill and pay yourself first,” he urged.

Mr. Hanna also said that it is very important to understand the time value of money and maximize the opportunity to grow money over time through compounded interest and investments like stocks, bonds and mutual funds that earn interest and pay dividends.

PHOTO-CAPTION

STARTING EARLY --- Kevin Hanna, Manager of BOB’s Treasury Department recently told Junior Achievers that budgeting and saving are absolute priorities for future success and the earlier they start the better it will be for them. Pictured from left: Megan Smith, Junior Achiever; Kazia Pearce, Junior Achiever; Kevin Hanna; Denell Moss, Junior Achiever; and Robyn Allen, Junior Achiever. (Photo by Terrance Strachan)