#SavingsMonth: 5 Ways to start saving today
July was Savings month, a month meant to remind us to save, keep savings and save smarter – and there is no better time to start than now.
But did you know that less than 30% of South Africans have a savings account and for women this number is even lower. The simple fact is that we are not getting the most out of our savings according to the South African Reserve Bank.
As a woman, whether you are just starting to save or you want to maximise your savings plan, here are five ways to bring home the bacon by saving and optimising those savings.
1. Set a goal
Saving with a goal in mind is excellent motivation to stay committed to your saving plan. It can be a short-term goal like buying a new pair of shoes in three months or a long-term goal like putting a down payment on a house in five years. Either way, if you are putting money away monthly and you don’t know why you are saving, then there is a good chance that you are going to stop saving or dip into your savings pool. Make use of online tools like Capitec’s savings calculator to help you determine how much money you need to put away each month in order to reach your goal in a specific time.
2. Review the budget
Saving is not easy, and a great way to start is to track your spending habits. A good budget will help you plan for the year ahead and avoid unexpected expenses. And regularly reviewing your budget to see where you can save that little bit extra, could be as simple as cutting out something small to make a big impact in the long run like carpooling to save the petrol, making a shopping list for groceries so you avoid impulse buys and paying your bills on time to avoid penalties.
3. Start small and open a flexible savings account
A flexible savings account is one of the easiest ways to start saving. These accounts allow you to have full access to your cash in case of an emergency, but your money can still grow if you are able to leave it for a while – perfect for getting comfortable with the basics of saving without too much commitment.
If you invest into a Capitec flexible savings account you will earn 4.85% interest, which is above the current inflation of 4.6%. With consistent saving, this could help fill a large gap in your savings plan. If you are prepared to lock in your savings for a fixed term of your choice, you could earn an even higher interest rate of between 6.9% and 9.4%.
4. Find a savings account that offers the best interest rates
By putting your savings into an account that correlates with your specific goals, you could be saving even more. MyTreasury.co.za notes that simply moving money from a call account that offers a 3% return to a long term fixed deposit with an interest rate of 9.4% for example, would effectively double or even triple your wealth over 10 years. At Capitec Bank clients earn at least 4.85% interest on positive balances from the first rand in their transaction account, and they get 4 free savings plans which they can fix to earn even higher interest. In addition clients can manage their account on the app, saving both time and money.
5. Be patient and wait for long-term rewards
Maya Fisher-French explains in eNCA’s Money Matters that present bias can often influence our approach to savings. “Present bias means we often place more value on our present gratification than on our future gratification,” she explains. When you commit to saving for the future, make it difficult to change that decision. A fixed term savings account would be good option for you if you happen to already have some savings that you won’t be needing soon.
Why not make this Women’s month the month you start a savings plan and in effect start paying yourself first. It may be tough at the beginning but the rewards, in the long term, will pay off for you and your family.
This post is sponsored by Capitec produced by BrandStudio24 for News24.