Top tips to help you save

Finweek English Edition - - MONEY - BY KRIS­TIA VAN HEER­DEN

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.

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