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I often get questions when doing financial talks or workshops from people who want to save but don’t know how and where. South Africans don’t have a savings culture and statistics indicated that we only save 15,4% of our GDP and it is getting worse. Since debt is easily available in South Africa, the need to save is becoming less, which is a dangerous situation. Don’t think of savings in a restrictive manner, think of it as a building block to create financial stability and wealth.
Start off small. It is a misconception that you need thousands of Rands to start saving. Develop a habit to put money away on a monthly basis. Aim to put away at least 10% of your net salary each month. The best way is to sign a debit order for the day after you have received your salary to deduct your savings and transfer it to a savings or investment account. It is important though to transfer your savings out of your bank account. If you leave it in your bank account you will be tempted to use it for something else.
Experiment with different savings and investments until you find something that work well for you. Start off with a notice or fixed deposit, moving to a money market account and then onto various unit trusts. Add a tax-free savings account to your portfolio to benefit from the tax savings. When you can invest more and are in a position to take on more risk, add shares and properties to your portfolio. There are multiple other investment types that you can consider: exchange traded funds, forex, gold, derivatives, cryptocurrency, art etc.
It might be true that saving won’t make you rich, but it will definitely secure a better financial future for you. Start saving today!
During the next few weeks I will be discussing the 10 financial concerns many South Africans have in more detail – subscribe to my YouTube channel and follow all the discussions.
Written by Ronel Jooste
CA(SA), Financial Consultant and Coach, Blogger and Speaker
Contact Ronel: firstname.lastname@example.org
For more information about my financial wellness programmes visit the website.