Being careful with spending and staying home instead of going on holiday are brilliant ways to save money. Photo: File
Being careful with spending and staying home instead of going on holiday are brilliant ways to save money. Photo: File

The best gift you can give yourself is a savings account

By Supplied Time of article published Dec 7, 2020

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This time of the year is normally about holiday planning and shopping.

However, on the back of what has been anything but a normal year, many consumers hard hit by the Covid-19 lockdown will have to do things differently this year – perhaps tighten the purse strings even further and plan a staycation instead of a getaway.

Neil Thompson, head of Product and Customer Value Proposition at African Bank says neither of these have to be viewed as negative and frustrating. In fact, being careful with spending and staying home instead of going on holiday are brilliant ways to save money.

“Initiatives like this, whether by choice or not, give you access to money you would otherwise have spent. So, why not take the money you will save by being a cautious spender and by not going on holiday and open a savings account?” Thompson says.

“The best gift you can give yourself is a savings account – in fact, it could be your gift to your family this year.”

Many people may say at this point “but how can I save money when I don’t have any extra cash?”

Thompson says it is possible to save on any income.

7 ways to become a great saver on a small budget

1. Set a couple of savings goals. What do you want to save money for? How soon do you want to reach this goal? It is important to set realistic goals or you could become frustrated and give up too soon.

2. Open a high-interest savings account and make a small deposit, like R100. When you see your money start to grow you’ll become inspired to increase the amount you are saving each month as soon as you are able to.

3. Automate your savings. Set up a debit order for an amount to be transferred into your savings account each month. You will not even notice it’s gone.

4. Cut out unnecessary expenses. Be brutal when you go through your bank statement and get rid of things you do not need or at least downgrade where you can to cheaper options.

5. Join a stokvel and other savings initiatives on social media. Not only will you be let in on the best bargains but you’ll also learn about saving money from the other members. Everyone works together towards a common goal – to save – and they share valuable hints and tips.

6. Make saving money part of your lifestyle; even get the kids involved. With everyone looking out for a bargain and seeing who can save the most, you will soon be on your way to reaching your savings goals.

7. Take advice from the right people. Just like any new venture, if you are a first-time saver you want to be sure your hard-earned cash is working hard for you in the bank. Do your homework to find the best interest rate at a reputable bank. Beware of make-money-fast savings schemes or people who have “an amazing” investment opportunity for you.

“Don’t let another festive season go by with regret about your financial situation. Set a goal to realise your dreams by this time next year, start saving money and you’ll soon reap the reward,” says Thompson.

“It is important to link your savings efforts to savings goals. Savers have a long-term vision and plan of what they want to achieve instead of just getting by day by day.”

PERSONAL FINANCE

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