TIPS FOR SUCCESSFUL SAVING

SAVING depends largely on willpower and discipline. The South African Savings Institute has the following advice:

• Set a target. Set and write down a goal, such as building up an emergency fund or going on holiday.

• Make it automatic. Set up debit orders so that money is automatically transferred into your savings accounts, investments or a retirement annuity (RA) fund. This will prevent you from spending money that you should be saving.

• Contribute the maximum. If you belong to an employer-sponsored retirement fund, ask your employer to deduct the maximum permitted contribution as a percentage of your salary. Retirement fund contributions are tax-deductible up to 27.5% of the greater of your remuneration or taxable income, capped at R350 000 a year.

• Get a financial coach. Find a financial adviser, preferably one who has the Certified Financial Planner qualification. An adviser can help you to stick to your savings goals, particularly when investment markets are volatile.

• Group savings. Start or join a stokvel or investment club with your family and friends. Being part of a group will help you to develop the discipline to save.

• Buddy up. Find someone who you can meet with regularly to discuss your savings journey. Hold each other accountable.

• Start them early. Get your child’s finances off to a good start by depositing cash gifts into a tax-free savings account or an RA in your child’s name.

• Ensure you’re on track for retirement. Check the statements from your retirement fund to ensure you are on track to reach your retirement savings target.