Saving can be a waiting game

THANKFULLY as a child, I was taught the valuable lesson of saving from an early age.

Of every R 1 I received from pocket money or holiday work, I was forced to save 40%, with no access bar for a specific pre-defined goal.

From the remaining 60%, 40% could be spent to my heart’s content and the other 20% had to be allocated to the less fortunate or a good cause.

I am grateful to this day for these valuable money lessons, although at the time these rules were often met with disdain.

Fast forward to this year and we find ourselves living in an era of instant gratification – from bingewatching the latest series via Netflix to continuously sharing every aspect of our lives on social media.

Creating wealth, however, does not occur in an instant and for most of us it not only takes time, but also an enormous amount of patience and determination.

It is inevitable that a newfound wealth-creation commitment will wither away at the sight of the first end-ofseason-sale if you do not carefully consider and approach your saving goals.

Start by putting together a plan composed of incremental, achievable goals.

This helps to avoid the risks that come with making big, sweeping decisions.

A certified financial adviser can assist with drafting and implementing a savings plan suitable for you.

They are also in a position to keep you focused on your investment goals, so you avoid getting sidetracked.

Tax-free savings accounts offer tax-free growth and are ideal for smaller amounts as individuals are limited to a maximum contribution of R33 000 a year.

Endowments are a tax-efficient investment vehicle for individuals with a marginal tax rate of more than 30% per year.

And with taxdeductible contributions made to retirement savings products like retirement annuities having been increased to 27.5% of your annual remuneration or income (capped at R350 000 a year), this too offers great value for longer-term savings – especially since all other savings are made with after-tax money.

Once the appropriate investment vehicle has been identified, investors can choose from an array of both domestic and global actively managed unit trust funds, passively managed exchange traded funds (ETFs) or even direct investments in listed shares on global bourses.