THE South African Savings Institute offers some savings methods to help you put away money for a future day.
Set a target: Many don’t save because they don’t have targets. Set and write down important savings targets such as an emergency fund, holiday fund and other savings goals.
Automated savings: Debit order transfers to savings accounts allow automated saving. You can set up debit orders with tax-free savings accounts, 32-day notice accounts and unit trust accounts.
13th cheque: Ask your employer payroll for a 13th cheque paid to you in December by skimming your salary. This extra salary cheque lets you to ride out the festive period and new year without the season badly impacting your finances.
Pension fund and contributions: When starting a new job, ask your employer to default to the highest allowable retirement fund contribution percentage of your income. You can also ask your employer to review your current contribution. Up to R350 000 of all annual retirement contributions are tax deductible.
Financial wellness days: Take time off if you need to but you must review your finances with a financial planner once a year. Regular meetings with a certified financial planning professional will help you remain in control of your spending and saving.
Group savings: Join a stokvel or savings club, or start your own with family and friends. The group develops the discipline required to be a regular saver.
Savings buddy: Become a savings buddy with a friend, someone you can meet regularly and discuss your mutual savings journey. By holding each other accountable, you encourage each other to save.
Children: Open tax-free savings accounts for your children. You can deposit money as gifts at various times. If relatives give cash as gifts ask them to deposit it straight to the relevant child’s account. If kids see how the money accumulates in their account they will be less inclined to spend it.
Domestic help: Set up a savings account or retirement annuity for your domestic workers. Their future retirement plans are often forgotten.
Financial products and insurance:Shop around and use a financial institution that rewards consistent savers either through a high-savings interest rate or cash back for no claims.