Saving for a brighter future

There are only two certainties in this world: death, and taxes. We’d like to add a third: savings. No matter what happens to you in the future, you’re going to need money.

Let’s be honest. Saving money is a challenge at the best of times. In today’s tough economy, it sometimes feels like you don’t have enough to cover your monthly expenses. Even if you’re scraping to make it to the end of the month, there are some things you can do to put a bit of money away. Here are five ways to start saving now for a better future.

Set a goal

‘I want to save money for my kids’ education’ isn’t a goal. It’s a wish. Set a goal that is SMART - Specific, Measurable, Achievable, Realistic and Time-bound.

An example of a SMART goal could be: ‘I want to save R100 a month for my kids’ education in 2020,’ as you can then plan towards it.

The Reserve Bank made life slightly easier by cutting interest rates earlier this year. Now, you could be paying around R165 less every month on a R1 million home loan, depending on your interest rate. You can either put this money into a savings account or keep your repayment the same, which effectively means you’re paying an extra R165 a month off on your bond. Keeping your bond repayment the same could cut a year off your bond and save you as much as R76 000 in interest.

Do your research

Not all savings accounts are created equal. Have a look at the various options that different banks offer, and compare the monthly fees, the minimum deposit required and how much interest you can earn on your money. The top banks have different savings accounts, with interest rates ranging from 0.76% up to 9.25%. Depending on the account you choose, the minimum monthly deposit ranges from zero to R59. Our tip: check for any promotions or incentives to open an account, like reduced fees for the first year.

Make your goal work

So you’ve set a goal, and chosen a savings account. Now make sure you stick to the plan. Consider setting an automatic stop order or debit order, or use a saving app or a savings pocket, as then you don’t even have to think about the payment, and the saving happens automatically.

FNB’s savings pocket is free, links directly to a cheque or transactional account, and offers rates of up to 2.3% for balances up to R100 000. This lets you differentiate savings funds from daily expenses. You can schedule transfers to the savings pocket via cellphone banking, online banking and app or at a branch. Other banks have similar savings methods: Nedbank has MyPocket, African Bank has MyWorld, and TymeBank has GoalSave. You can track your progress weekly or monthly by using money management applications such as Moneysmart, or your own bank’s money management tools.

31 October is World Savings Day. If you start saving R500 a month now, you could earn as much as R247 in interest by 31 October, depending on the bank and offers available.

Check your credit report

A credit report gives you a full picture of your financial health, including your debts and all credit accounts that exist under your name. Knowing this information can prevent any unexpected expenses down the road, and can help you rebuild your credit score.

While saving is critical, credit can be a valuable tool, if used wisely and managed properly – if you’re buying a home, taking out a study loan, or even paying for emergency expenses. If you have to use a credit card for some reason, make sure you pay the amount in full in the interest-free period to avoid extra charges.


You can get your credit report for free, once every 12 months, from information providers like TransUnion.