Saving money takes a lot of effort

by - October 31, 2016

As we celebrate World Savings Day I've learned that saving money takes a lot of effort especially in our consumer culture. I don’t know about you, but there are many sacrifices I’d prefer NOT to make. To get to where I needed to financially I had to cut things and I had to be a little bit more creative with the cash I have to accomplish those big financial goals.

If you are trying to save money but are having trouble then take a look at these ideas to help you start. Wikus Olivier, debt management expert at DebtSafe, shared these ideas: 

- Set clear goals for your budget so that you can see exactly what is going on, remembering that it’s important to prioritise your objectives: for example, paying off an expensive loan should take precedence over saving to purchase a luxury item. 

- Add a timeline to your savings plan to show how much time you have to reach each savings goal and to keep you motivated.

- You don’t necessarily have to deposit a large sum of money into a savings account or money market. A few bucks a month is still a very good start. 

"As it is often the case, it is easier to keep going with something that is difficult, if you know why you are doing it - and it is the same with savings. There are several objectives why people save, for example for children's education, retirement, cars, houses and other short-term goals namely holidays," says Wikus. 

Various savings options are available

When I started my saving journey, I started out with a unit trust and a retirement annuity. And I wasn't that interested in an RA because I thought I was young but fortunately for me my company insisted on it. Looking back now, I am glad they did because I probably would not have started. 

Today, we have so many saving mechanisms including cash at home (in a safe), savings accounts, money market options with banks, retirement annuities, endowment policies and unit trusts.

Wikus encourages us to consider each mechanism’s pros and cons before deciding what will work best.  

Here are the options to consider: 

- Money boxes or piggy banks are ideal to teach children to save from a young age, while adults can use a safe. Unfortunately, there is a risk of possible theft involved and no interest will be earned.

- A savings account is a good option if consumers exceed the minimum balance on the account and there are nice low-cost savings accounts available for children. 

- A money market account is ideal when you are able to deposit a few thousand rands all at once.

- Retirement annuities are specifically used when consumers would like to save for their pension, and endowments are essential when someone dies or is diagnosed with a critical illness. 

- Unit trust investments give consumers immediate access to their money whilst growing at a steady rate, but they have to be able to deposit the minimum premium of about R500 a month.
"If you haven't started saving, start thinking of ways to cultivate a savings culture in your own home. However, if you find that it is impossible to save because your necessary expenses and debt premiums are more than your income, contact the friendly debt advisors at DebtSafe to assist you with their successful debt review programme," says Wikus.

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