Follow these steps to work out how much you need to save every month if you want to buy something expensive like a new appliance or car or spend a lot of money on a special event like getting married or going on holiday.
SET A SAVINGS GOAL
This is your goal, such as a new couch, a car or a December holiday.
Work out how much you need to save and by when
For example, get prices of appliances and furniture from local stores, websites or second-hand dealers.
If you are saving for a special event such as a wedding add up the cost of the things you will need such as a dress, venue, food and lobola.
Once you know how much you need to save and by when, work out how much you will need to save each month. If you don’t have much time to save, for example less than a year, simply divide the amount you need to save by the number of months. Or, use the savings calculator on your bank’s website to work out exactly how much you need to save and how much interest you will earn on your savings.
Savings goal: New TV in July 2021
Cost: R6 000
Amount to save each month: R480, with a 4% interest rate
The benefits of avoiding debt When you save for something you don’t have to pay interest on a loan amount, worry about how you will meet your monthly instalments or run the risk of getting a bad credit record. And you get to enjoy your new item or special day knowing that you worked hard and saved for it!