How much is in your savings account? If you are like most South Africans, your answer is likely to be “not enough”. It is possible you don’t even save, and you are living from one paycheck to another.
Statistics show that many South Africans have hard time-saving. Only about half of the South African metropolitan population is saving. Supposing a financial crisis demanding R10,000 presents itself, more than a third of South Africans would have to borrow money. Some would borrow from friends others from private loaners. Only a few would have enough savings to cover the expenses.
If you have been wondering where to start, read on for some easy-to-implement tips.
Saving requires strategy, commitment, and often – sacrifice.
Implement the 52-Week savings challenge
Have you heard about the 52-weeks Savings Challenge? Many people are starting to show interest in this challenge. The saving strategy is native to North America but it is applicable anywhere. We can tweak the strategy to fit the South African context.
When you save using this strategy, you save a certain amount of money each week, until the end of the year.
Let’s say you start your first week with R10:
- On week two, you save R20.
- Week three, you save R30.
- Week four, you save R40.
- Week five, you save R50.
- And so on…
Every week you increase the figure by R10.
You would continue with this routine until you get to the 52nd week of the year. Starting with R10 on week one, you would deposit R520 in your savings account by the end of the saving period, the 52nd week.
Your total savings would add up to R13,780 yearly. That figure is only a few digits shy of $1,000.
Starting with R10 is a wise decision. Reason being: as the year progresses, you will need to chip in more. For you to achieve your target, you will have to save a total of R2020 in the last four months of the year. Do the calculations.
That can be a challenging financial target but one that is doable. You only have to save a little cash for those months in advance when you have extra cash. If on one month your account has about R500, you don’t have to save only R100, supposing it’s your 10th week. You can put aside R100 from your extra to cover for the upcoming challenging months.
All in all, if R10 seems too difficult for you to manage, you can always set a figure of your choice. Starting with let’s say R10 seems manageable but you miss one or two weeks of savings, you could completely lose track. Even so, if you are in for a challenge, you can begin with a bigger figure. Let’s say R20, R30, or even R50. It’s all up to you. When you put more into the savings kit, you save more with time but you need discipline. Also, you need a sure source of income to keep up with the momentum.
Save with Friends; the More the Merrier
You can get your savings account up and running all by yourself. Or, you can get a like-minded group around you and create a savings challenge. The benefits of this are enormous, from having accountability partners to having a support system.
It works like this: you bring together a couple of your close friends, relatives or a mixture of both. Once you have a group in order, you then set a start date and a specific amount of money to be put away on each date.
You could start with any amount you want to collect as a group. But it should be a figure everyone can afford. You could peg the starter amount at R10, R20 or even R50. The key is to agree on an amount that is comfortable for everyone in the group.
Live your life
It is time you accept you are in caught up debt loophole. Or that your spending is on a spree. Changing your lifestyle may not seem like a saving tip but try it. Its impact hits different. If you analyze your lifestyle and spending, you probably don’t need all that. It is understandable if your income is not enough but still you can always save a few Rands by tweaking your lifestyle. For instance, you could find yourself spending on unnecessary stuff by looking at ads on TV. Also, scrolling through your Instagram Feed for long sessions could set you up for the same trap.
All it takes is a few ads and HD photos and videos of your online buddies living the life to trigger you. Ads alone play a huge part in convincing consumers to buy products or pay for a service. “Buy this”, “you need that”. Research shows ads are rewiring your brain, such that you could get addicted to the content. You could find yourself spending money on popular brands in town. And it all starts from the subconscious mind.
When you login into platforms like Instagram, these same targeted ads consume your mind. Far from that, constant browsing on social forums like Instagram could pressure you into buying things you don’t need. You see, in the social media world, almost everyone is having it good. You could find your spending all your income to maintain a fake, lavish lifestyle. And you would do all this to show off to the world that you got it together, which could be far from the truth.
In reality, some people may believe you. But it is not worth the hassle. Social media validation is not necessary when your debts are accumulating. Worse still, you don’t want that validation when you cannot save at least five or 10% of your income for emergencies. Fix your finance first; then you can show off on Instagram and Tinder.
Oh, there is nothing wrong with browsing social media. But if you spend all spare time there, you are more likely to become assimilated into that world. Be real to yourself. Live a life you can afford. You could find that you don’t need to take up payday loans and mobile loans or live from paycheck to paycheck.
You don’t know when a crisis can hit you. It’s always an advantage to have some personal savings. Even if you are saving with other means like through health insurance or a Sacco, set aside a personal savings kit. Peg any amount as the starting point, and you are good to go. R500 in your savings kit could take you far than you can imagine.