Turn over a new savings leaf

Written by Your Future Now

South Africans have a bad reputation when it comes to savings. We are, apparently, among the worst savers in the world! And it’s not only because we think we don’t have enough money to save; ignorance and a lack of willpower and commitment are real issues too.

July is national savings month – a great opportunity for us all to turn over a new savings leaf.

According to research done by Old Mutual, our spending habits often get us into trouble and out of money to save.

You probably know from first-hand experience that you spend more money when you shop with children. But did you know it could be as much as 30%?

Also be aware of specials on things you don’t actually need. If it was on your shopping list to start off with, go for it and enjoy the saving. But if you hardly ever use baked beans, don’t buy four tins just because of the buy-3-get-1-free special that’s running.

And then there’s impulse buying. You know, when you are waiting to pay and you pick up a chocolate bar, or a packet of chips or a lip balm? Chances are you did not have any of that on your shopping list, yet you leave the store having spent a few more rands than what you had planned. It may not be much, but if you do that every time you’re in a store, it adds up to quite a bit of money that you could have been saving.

Now let’s get to saving.

The most important thing is to start. It doesn’t matter with how much you start or even where you keep your savings, especially at first.

You can start with something as informal and simple as a jar in which you put all your change, or the amount you have decided to save every week.

Stokvels are another fairly informal way to save. A stokvel is typically run by a group of people who save a set amount, say R500 a month. Each member of the stokvel has a turn to receive all the money collected in a particular month.

When you are ready for a more formal approach, open a savings account at a bank. In this way, the money you save will grow because it earns interest.

If you are saving for a long-term goal, consider a tax-free savings account. It can take the form of a money-market or fixed-term bank account, a unit trust fund or a JSE-listed exchange traded fund.

You can contribute up to R33 000 a year, or R500 000 over your lifetime. You do not pay any tax on the interest or dividends earned by your investment, and you do not pay capital gains tax on any capital growth.

If you’re still not sure how to actually start, here are some savings tips:


  • Draw up a budget and stick to it. Keep track of every cent you spend, and soon you will see where you can spend differently to start saving. For instance, give up expensive habits like smoking, drinking or gambling and save that money.
  • Set a target. Decide what your goal is and write it down. Examples are building up an emergency fund of R10 000 or going on holiday.
  • Make it automatic. Set up debit orders so that money is automatically transferred into your savings account. This way you can’t be tempted to spend instead of save.
  • Get support. Start or join a stokvel or investment club with your family and friends. Being part of a group will help you to develop the discipline to save.
  • Buddy up. Find someone who you can meet with regularly to discuss your savings journey. Hold each other accountable.


Article Categories:
DIY · economy · Personal Well-being · Saving and Spending

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