Kgomotso uses the Standard Bank Stash app to save into a tax-free savings account (TFSA). We have written about this great investment tool on these pages before. Stash is an app available to anyone, you do not have to bank with Standard Bank, and can be downloaded through Google Play or Apple’s App Store.
You link your credit or debit card to the app and every time you spend on the card, you can select to have R5, R10 or even R50 immediately transferred to a zero-fee TFSA. The account is invested in a fund that tracks the performance of the 100 largest companies in South Africa. It’s a great way to turn spending into saving.
READ: Tax-free savings account
Monique found that sticking to her grocery budget was a challenge, so she now transfers her grocery money into a TymeBank account and only uses that to buy groceries. She also benefits from the double Pick n Pay Smart Shopper rewards, which you receive when you use a TymeBank card to pay for purchases.
Nonhlanhla has a debit order that goes straight into a 32-day notice account where she saves up to pay for furniture or do house renovations. She only ever spends cash, not credit, and doesn’t touch the money for six months at a time.
With such easy access to credit, many of us have forgotten what it is like to save for something rather than use credit cards. By having a debit order in place, Nonhlanhla also makes sure her savings are prioritised before spending.
Andile plays the clothing retailers at their own game. He waits until there are great sales of 50% off before he buys. He then uses the six-month interest free period on his clothing account to pay it off. This is a great way to avoid paying interest and keep the money in your bank account, but it requires discipline. Never opt for the 12-month interest-charging account and always meet your payments on time.
READ: What you should know about tax-free savings
Shirin uses a piggy bank to save all her silver coins. This is one of those really simple but effective savings strategies. Did you know that if you fill a 2l coke bottle with R2 coins it adds up to R3 000? If you stick to R5 coins you could have R5 000 saved!
Joy uses her Nedbank Greenbacks rewards to invest in unit trusts. Usually we use our loyalty rewards for spending, but it can create the perfect opportunity to start investing. Find out if any of your reward programmes offer investment options.
READ: FNB vs Discovery bank
Amanda committed herself to the 52-week savings challenge. In this challenge you start by saving R10 a week and each week you increase it by another R10. For example, in week one you save R10, R20 in week two... by week 20 you would be saving R200 per week. It gets tougher as the numbers climb, but it is a great way to gradually start saving.
Nosivatho saves 35% of her income each month, which she divides into various buckets. She puts money into a retirement annuity and belongs to a stokvel that pays out in January for school fees and another that pays out in turns during the year. She also has a dedicated savings account for her car deposit and keeps her change in a piggy bank. What is great about this approach is that Nosivatho is saving for specific needs, so each rand has a goal. There’s her long-term need for retirement as well as her shorter-term need for school fees and planning for a new car.
Finally, many of our respondents said they bought grocery vouchers each month to save for the end-of-year festive season or kept their loyalty rewards for that big December month. Planning for the end of the year is a great way to protect yourself from going into debt over that festive spending frenzy.
CAN YOU SURVIVE BEING A MISER FOR THE WHOLE OF JULY?: This national Savings Month, Sanlam is challenging consumers to live their most frugal life. Master being a miser by partaking in Sanlam’s 31-Day Frugal Challenge. You have 31 days to be your best, most financially savvy self.
Andre Wentzel, solutions manager at Sanlam says frugality is not a new concept. It’s something commonly associated with our grandparents and the money-under-the-mattress scenario. Wentzel says it’s great to adopt this mindset, but rather invest money in savings vehicles that can grow your money: “Come up with granular savings goals, such as saving for your child’s education and a holiday overseas. Having goals makes it easier to be frugal because you have tangible milestones that you commit to saving more for. Decide how much you need to save in total and what your monthly contributions will be, and then pick a savings vehicle that matches each goal. Set up debit orders so you always pay yourself first.”
Ideas from savvy youngsters to manage money better
Carpool: It’s been said time and again, but few of us have actually got around to consistently carpooling with colleagues. Now’s a great time to gather a carpool crew and share the cost of fuel or investigate viable public transport options together. Of course, other solutions to cut down on “petrol poverty” include working from home and virtual meetings via platforms such as Zoom and Skype.
Say bye to expensive bank charges: This is a super simple way to immediately save. Check what you’re paying in monthly bank fees and investigate whether you are on the right account option. Do you make use of all the benefits offered on that option? If not, change to a more affordable account option and save on banking fees.
Get smart with your geyser: Geysers use an astonishing amount of electricity each month. So lower the thermostat on your geyser to cut down on costs (no lower than 60°C for health reasons).
Have a clothes-swapping party: Gather friends or colleagues and arrange to have a clothes swap. The rule is you can only take someone else’s clothes if you contribute two or three of your own good-quality items to swap. So share and get a new wardrobe for free.
Stage a garage sale: Watch a feng shui video on decluttering on YouTube. Once you’re suitably inspired, go through your home and find all the furniture and items that no longer bring you joy. Have a mini garage sale or sell the items on Facebook Marketplace or an equivalent platform.
Negotiate cash discounts: Never be afraid to negotiate. A little-known fact is that most doctors and dentists are willing to give significant discounts if you can pay in cash, for example.
Eat in: Have “one favourite dish” potluck meals with loved ones. Ask everyone to bring a favourite dish to share. If you end up with three puddings and one starter, that’s just a delicious advantage. On the topic of eating in, planning more vegetarian meals is a great way to save.
Get serious about data: Install a data manager app. Turn off all automatic app updates on your phone to consume less data. South Africa still has some of the world’s highest data fees, so this is an essential one to consider.
Join a loyalty programme: Loyalty programmes can sometimes save you a considerable sum. Do the maths and carefully weigh up what joining costs you and what you gain in exchange.
If it’s broken, fix it: We often just throw things out when they break because of the effort and time involved in fixing them. Next time try to fix something if you can, otherwise get a quote from a professional. Even something as simple as a pair of shoes – resole well-loved boots, for example, rather than getting a new pair.