Saving money - sounds like one of those New Years’ Resolutions that gets forgotten after three weeks. Sadly, savings of any form is just really hard to do. Many of us work paycheque to paycheque, seemingly unable to save. This isn’t for a lack of wanting to, but simply because of the world we live in today.
Consumer culture has South Africans’ in her thrall, with a recent Old Mutual survey showing that over 65% of responders would spend at least some of any windfall they might receive. That same survey showed that 80% of respondents wanted to learn more about saving money in general - a clear indication that there is an actual willingness to want to save amongst South Africans.
Savings accounts have always had a bit of a bad rap - more often than not the fees outweigh the interest incurred, making them pretty awful for any growth. This means most of us tend to look elsewhere when considering saving. The recent addition of Tax Free Savings accounts should definitely have piqued the interest of anyone wanting to save money over a long period of time.
Pretty much every financial institution offers these accounts, which let you save up to R30 000 a year and never incur any form of tax on that money if you wish to withdraw it. Perhaps slightly more useful are the Tax Free Unit Trust accounts that offer your money slightly more scope for growth depending on what level of risk you are willing to undertake.
The major problem most of us have with saving money is that we simply don’t feel like we have any to save. This is generally down to lack of awareness in how we spend our money - more commonly known as budgeting. The hated B-word.
Not a glamorous thing that’s for sure but one that’s trying to worm its way into our lives. Mobile phone apps like 22Seven and Mint offer a slightly more up to date version for today’s society, while a lot of banking applications make checking your current finances much simpler. There are a few things we can consider when trying to save:
Track Spending - using a budget correctly will let you see exactly where your money is going. This in turn will allow you the chance to see where you can start to save by reducing certain expenses
Manage The Obvious - there are constant fluctuations in things like petrol and electricity. By knowing when those prices are set to go up or down you can save yourself a few Rands
Use the correct ATM - most of us rely on card purchases these days but there are things we need cash for. When you do draw money, make sure you do it from your own bank’s ATM. As obvious as this might sound, it can end up saving you a lot!
Snub The Small Things - you wouldn’t believe how fast the small things add up. A chocolate here, a magazine there and suddenly you’re down a few hundred Rand each month. Be aware of the little things your money goes to and try curtail some of it – every cent counts in the end
Shop Like Mom - lists and lists! Most of us have an idea of what we need when we head to the shops. However, we often come back with far more than we bargained for. Make a list and stick to it. By doing so you will find yourself cruising the aisles less and saving more in the long run!
Saving isn’t something that comes naturally to most of us but it is something we need to start embracing. Challenge yourself and see how much you can save in a month - it might surprise you!
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