12 Alternative Savings Methods

12 Alternative Savings Methods

This article was published with the permission of the South African Savings Institute (SASI). For more information please visit www.savingsinstitute.co.za

Saving is not only dependent on income, it is largely dependent on willpower and discipline. These solutions allow savers to have willpower and discipline by passing it on to others.

    1. Set a Target: The reason why many of us do not save is because we do not have set targets. It is important to set and write down important savings targets such as an Emergency Fund, Holiday Fund and other targeted savings. Do you know your targets?

    2. Automated Savings: Debit orders to Savings Accounts allow automated saving. You can set up debit orders Tax Free Savings Accounts (TFSA) , 32 Day Notice Accounts and Unit Trust Accounts

    3. Baby Gifts:  You can seed a child's future savings by requesting baby gifts of cash to deposit into TFSA or even taking out a Retirement Annuity (RA) for a baby

    4. Children: Open TFSA Accounts for all your children to maximize the benefit they receive from these accounts. Set up Debit orders to contribute to these accounts as they grow up together with cash gifts they receive on birthdays etc. You can encourage grandparents and other family to also contribute regularly.

    5. 13th Cheque: Ask your employer payroll to save for a 13th cheque paid to you in December by lowering your salary. This extra pay cheque will allow you to ride out the Festive Period and New Year expenses without major impact on your finances.

    6. Pension Fund Contributions: When starting a new job, ask your employer to default to the highest allowable retirement fund contribution percentage of your income. You can also ask your employer to reiview your current contribution. Best of all, all retirement funding contributions are tax deductible annually up to R 350 XXX

    7. Financial Wellness Days: Ask your employer to give mandatory time off to review your finances with a Financial Planner once a year. Regular meetings with a Certified Financial Planning Professional will help you remain in control of your finances.

    8. Group Savings: Start of Join a Stokvel or Investment Club with family and friends. The group will encourage you and allow you to develop the discipline required to be a regular saver.

    9. Domestic Help: Set up a Savings account or Retirement Annuity for your domestic helper. These important members of our families' are often forgotten in future planning.

    10. Retirement Fund Statement: By receiving your retirement fund statements monthly or quarterly, you can be encouraged to keep track of your savings to ensure that you have sufficient income when you retire

    11. Financial Products and Insurance: Shop around and use a financial institution that Rewards consistent savers either through a high savings interest rate or cash back for no claims.

    12. Savings Buddy: Allow your partner or friend to be a savings buddy whom you meet with regularly to discuss your savings journey. By holding each other accountable, you can help each other to grow wealth.