A global pandemic transformed our lives: what we do on the weekends, how we celebrate birthdays, how we “get to work”. In fact, it’s changed our entire culture. We’re staying in more and going out less, and this often means we’re spending less money. You may start to notice that you have a little extra cash in your pocket than before. But how can you use it today to secure your tomorrow?
Our money-savvy suggestion? A savings account.
“Saving is the act of putting money away in a safe place with the intention of using it in the future”, according to Standard Bank. All savings accounts are different. Some can earn you interest on the money you put away. Other savings accounts need notice before you withdraw from them which offers your savings some protection…from yourself (this feature can prevent impulsive spends on a whim!). Either way, all savings accounts offer peace of mind in their stability. Unlike investments, they’re low-risk and don’t fluctuate with the stock market.
Are you unable to save due to a desperate financial situation? We can help.
Savings accounts come in handy for:
- Emergencies and rainy days – you never know when disaster or illness may strike
- A deposit for a car or house – to kickstart the next chapter of your life
- A holiday – a well-deserved breakaway can cost a pretty penny
- Education – invest in textbooks, course costs and enrollment fees
Here are our top tips to kickstart your savings:
Tip 1: Start Small
We all have to start somewhere. Even if it’s just an extra R50 or R100, those tiny amounts will begin to add up. For example, if you save just R10 a day, you will have an extra R3 650 by the end of the year. The first step is always the hardest. You have to commit to taking a portion of the money you have now, and putting it away for later. To begin your lifelong savings journey, simply set up a savings account with your bank or put aside a dedicated piggy bank (the latter will not accrue interest, but it will make it easy for you to stash spare cash and loose change).
Tip 2: Separate Your Savings
If you leave your extra money in your purse or your general bank account, it’s more likely to be spent. You have to keep your savings money separate from your general cash flow so that it will be safe for when you truly need it. As for the percentage of your salary that you should put into savings -l it depends. This percentage could fluctuate depending on your job, your financial goals, and your expenses, but one way to go about it is to follow the 50/30/20 Rule and put 20% of your income away. 50% is then used for essential needs, and the other 30% goes towards your wants.
Tip 3: Save on Pay Day
Once you’ve figured out how much you’d like to save each month, make sure you deposit that amount into your savings as soon as you get paid. Don’t wait until the end of the month when you’re low on cash and become fast and loose with your financial goals. Rather adjust your expenses and non-essentials for the month to prioritise your savings. With some accounts, you can look into setting up an automatic transfer to immediately move money into your savings right after you get paid.
Saving is no easy task. It takes massive financial discipline to save money. When consumerist culture constantly calls us to “spend, spend, spend”, we have to train ourselves to live for the future.
You may find it impossible to stay away from the forbidden fruits that you’ve set aside, or maybe you need every last cent of your paycheck to pay your bills, settle your debts and get through the month. Regardless of your situation, it’s essential that you shift your mindset to view savings as a NECESSITY, rather than a luxury, and plan to incorporate regular saving into your monthly budget.
Luckily, we’ve got your back.
Our team of financial advisors are here to work with you to create a realistic roadmap to financial freedom so that you can keep your money for what matters most.