Tips from SASI to help you save

7/03/2017


According to South African Reserve Bank (SARB) figures, in the last 16 years we have seen a decline in our savings rate, reaching a record low of -2.70 in 2013. However, we are now seeing small increases off a very low base, with the Household Saving Rate in South Africa increasing to -0.30 percent in the first quarter of 2017 from -0.50 percent in the fourth quarter of 2016.

Saving is not only dependent on income, it is largely dependent on willpower and discipline. These solutions allow savers to have willpower and discipline by passing it on to others.
  1. Set a Target: The reason why many of us do not save is because we do not have set targets. It is important to set and write down important savings targets such as an Emergency Fund, Holiday Fund and other targeted savings. Do you know your targets?
  2. Automated Savings: Debit orders to Savings Accounts allow automated saving. You can set up debit orders Tax Free Savings Accounts (TFSA), 32 Day Notice Accounts and Unit Trust Accounts.
  3. 13th Cheque: 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.
  4. Pension Fund Contributions: When starting a new job, ask your employer to default to the highest allowable retirement fund contribution percentage of your income. You can also ask your employer to review your current contribution. Best of all, all retirement funding contributions are tax deductible annually up to R 350 000.
  5. Financial Wellness Days: Ask your employer to give mandatory time off to review your finances with a Financial Planner once a year. Regular meetings with a Certified Financial Planning Professional will help you remain in control of your finances.
  6. Group Savings: Start of Join a Stokvel or Investment Club with family and friends. The group will encourage you and allow you to develop the discipline required to be a regular saver.
  7. Savings Buddy: Allow your partner or friend to be a savings buddy whom you meet with regularly to discuss your savings journey. By holding each other accountable, you can help each other to grow wealth.
  8. Baby Gifts: You can seed a child’s future savings by requesting baby gifts of cash to deposit into TFSA or even taking out a Retirement Annuity (RA) for a baby
  9. Children: Open TFSA Accounts for all your children to maximize 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 etc. You can encourage grandparents and other family to also contribute regularly.
  10. Domestic Help: Set up a Savings account or Retirement Annuity for your domestic helper. These important members of our families’ are often forgotten in future planning.
  11. Retirement Fund Statement: By receiving your retirement fund statements monthly or quarterly, you can be encouraged to keep track of your savings to ensure that you have sufficient income when you retire.
  12. Financial Products and Insurance: Shop around and use a financial institution that Rewards consistent savers either through a high savings interest rate or cash back for no claims.
 SASI Chairperson, Prem Govender, says the household savings agenda is a key national priority. We believe that South Africans can save and invest more domestically for the greater good of our economy. As we sit in a technical recession, it is a fact that domestic savings can be a driver of internal economic growth. There has never been a better time to save than now.

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