Sav­ing cre­ates a buf­fer for a rainy day

Vuk'uzenzele - - General - Jauhara Khan

As South Africans strug­gle under in­creas­ing fi­nan­cial pressure, a sav­ings buf­fer be­comes even more im­por­tant, yet there is less fo­cus on sav­ing and peo­ple are in­creas­ingly us­ing credit to fund their ba­sic needs.

That is ac­cord­ing to South African Sav­ings As­so­ci­a­tion CEO Ger­ald Mwan­di­ambira

He added that debt cre­ates a vi­cious spiral of debt es­pe­cially for young peo­ple.

“It im­por­tant for those who are able to save to use all the in­stru­ments avail­able to im­prove their long-term fi­nan­cial sus­tain­abil­ity.” Mwan­di­ambira shared a few tips to help you save:

It is im­por­tant to set and write down im­por­tant sav­ings tar­gets such as an Emer­gency Fund, Hol­i­day Fund and other tar­geted sav­ings.

Debit or­ders to Sav­ings Ac­counts al­low au­to­mated sav­ing.

Start or join a Stokvel or In­vest­ment Club with fam­ily and friends.

Al­low your part­ner or friend to be a sav­ings buddy whom you meet with reg­u­larly to dis­cuss your sav­ings jour­ney.

You can seed a child’s fu­ture sav­ings by re­quest­ing baby gifts of cash to de­posit into a Tax-Free Sav­ings Ac­count (TFSA) or even tak­ing out a Re­tire­ment An­nu­ity (RA) for a baby.

Open TFSA ac­counts for all your chil­dren to max­imise the ben­e­fit they re­ceive from these ac­counts. Set up debit or­ders to con­trib­ute to these ac­counts as they grow up to­gether with cash gifts they re­ceive on birth­days. You can en­cour­age grand­par­ents and other fam­ily to also con­trib­ute reg­u­larly.

Ask your employer pay­roll to save for a 13th cheque paid to you in De­cem­ber by low­er­ing your salary. This ex­tra pay cheque will al­low you to ride out the fes­tive pe­riod and New Year ex­penses without ma­jor im­pact on your fi­nances.

Set up a Sav­ings ac­count or Re­tire­ment An­nu­ity for your do­mes­tic helper. These im­por­tant mem­bers of our fam­i­lies are of­ten for­got­ten in fu­ture plan­ning.

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