Saving is within everyone’s reach
People often wrestle with the concept of saving money, with many asking questions like: What is a savings account? How do I open a savings account?
We understand that tough economic conditions are forcing consumers to tighten their belts. You too may feel you are living hand-to-mouth with little room to manoeuvre financially, so where will you still find money to save?
Often, for people who do not know how to save money, it is simply a question of getting the right advice. Burying your head in the sand is not going to get you any closer to your goal. Knowledge is a powerful tool that will help you to start to saving money and then grow your savings.
Saving money to achieve your dreams or secure a good future is within everyone’s reach.
5 tips on how to save money in tough times:
- Budget. Drawing up a monthly budget forces you to examine your income and expenses. You can make better decisions if you know how your salary is shaping up in terms of covering your expenses and debts.
- Hold the cream. Be realistic about how much you are spending on things like entertainment, restaurant meals or a coffee on your way to work each morning. Cut out this unnecessary spending and you will be surprised at how much you can actually save. Open a savings account and put this extra money in immediately to avoid the temptation of spending it.
- Save together. Community-based savings schemes have really taken off in South Africa. It makes sense to pool your resources with friends, family or your broader community and save together towards a short-term or long-term goal. In this way, everyone, no matter their salary, has the chance to invest and share the rewards coming from a good interest rate and affordable bank fees.
- Manage your debt. The only way debt magically disappears is if you pay it off. Debt rises with higher interest rates and it grows with interest every month, which can make it seem insurmountable. Put any disposable income towards your debt and keep the regular payments up.
- Think ahead. A good reason to grow your savings is for emergencies, like car repairs or medical expenses. This extra money can be a lifeline when you need it most.
It is advisable to think both short-term and long-term when you are putting money away.
The most important thing in your future is likely to be the day you retire from the working world. Retirement should be a time to relax, safe in the knowledge that you are financially prepared for this next phase of your life.
If you are not putting a portion of your income away at the moment, you are not alone. Sadly, this is the reality for many people.
As stated in an informative African Bank blog about how to save money monthly, only about 15% of working South Africans are saving money – that is only 3% of the entire population!
This interesting article also covers the benefits of a tax free savings account. With African Bank’s Tax-Free Savings account, you can deposit up to R33 000 per year and up to R500 000 over your lifetime – tax free! Your original interest rate never drops, but you will benefit if the interest rate increases.
Make the wise choice - start saving for a better future today.