Top tips to help you save
When we kicked off this series, we promised t o g e t y ou f r om f inancially f lustered to investing with conf i dence. Until now, however, we’ve spoken very little about saving and investing and rather a lot about how to get your financial life in order.
If you’ve been following this series, you should have – or should be in the process of creating – an emergency fund equal to three months’ income. You should also be actively paying off your debt and have an income replacement and disability product to protect your income. Once all of these things are in place, you are ready to save and invest.
Nitesh Patel, head of personal banking at Standard Bank, says it’s often our mindset, rather than our income, that stands in the way of saving. Creating room in your budget for discretionary savings starts with an understanding of your current spending habits. Patel advises you start this process by recording what you spent your money on at the end of each day.
Lezanne Human, CEO of FNB Savings, Investments and Fiduciary, says while many South Africans believe they can’t afford to save, it ’s important to create room in the household budget for savings sooner rather than later.
“Those who start saving early will reap the rewards in the long term. Time plays a huge factor in how your savings will grow, so the earlier you start to save, the more you earn because of compound interest,” she says.