Discipline a necessary skill when investing your hard-earned cash

Over the past few weeks there have been reports about stokvels that stole money from people who were promised returns on investments in just a few months.

A 52-year-old man told Sowetan’s sister publication Sunday Times that he had invested his retirement savings into the stokvel, which initially made two payouts on previous R10,000 investments.

Based on this experience, he thought he could make more money and recruited family and friends.

Together, they invested more than R1m and the stokvel runners disappeared.

A case of fraud is being investigated.

There was also a report about a stokvel in Tzaneen, Limpopo, that was robbed of money after thugs entered a woman’s house and demanded bank cards and pins at gunpoint.

This story kept social media investigators on their toes for days. Police at the time said they were investigating a case of house robbery.

These stories give us nightmares. No one wants to lose their hard-earned money just like that.

If you’re among people who don’t trust that your money will be kept safe in a stokvel, there are other ways to save.

You can either open a savings account and make monthly deposits into it. If this is not a fixed-term savings option, it will require a lot of discipline.

Same as keeping iskotokoto.

Discipline means you do not run to open the money box or cash out your savings whenever you want.

To learn how to be disciplined, you can start by setting lower targets over shorter periods. For instance, you can set out to save R3,000 from January to June.

If after the six months, you have reached your goal, you can up your game or continue with the same savings plan for the last quarter of the year.

Learning discipline is hard at first but you can remind yourself of the goals you have to stay on course.

Another way is to go to your bank and have a stop order every month, which will go into your savings. Many banks offer savings options and there are a number of investment periods to choose from.

The beauty about it is that the longer you invest, the more interest you earn.

Based on your savings goals, you can choose a savings period from months to years. You are in total control of your money, can set your own target, what you can afford to put away every month and for how long.

FNB retail and cash investments CEO Himal Parbhoo says: “One of the key considerations when saving money is to ensure that you save in the correct savings vehicle that will yield desired outcomes based on your financial goals.

“For example, you need to define whether you want to have immediate access to your money or over a notice period. This also determines how much interest you get.”

For those who want to save for groceries for December, various supermarkets offer gift card options and you can deposit from as little as R50 up to R10,000 for a gift card.

This is a good way to save with your friends or family. You have full control of the card and there is little chance of getting scammed or having your money stolen from you.

The good thing is that you can use it whenever you need to.

However, I’d encourage you to keep saving and only use the card when there is a pressing need to do so other than its intended goal or period.

As we all get back to reality, it is important to look at our financial positions and let go of habits that may lend us in debt.

“Clearly defining your savings goals and researching the right savings vehicles is important in ensuring that you meet your financial goals. If you are unsure about the right savings vehicles that aligns to your goal, it is advisable to consult your bank or certified financial advisor for assistance,” concludes Parbhoo.

Parbhoo gives tips on how you can take charge of your financial journey

Define your financial goals: Your financial goals will give you a clear direction of what you want to achieve and help guide in making the right financial choices that aligns with your goals. It means drawing up a plan that will highlight what you want to achieve in the new year.

This plan will keep you honest on progress and look at the measures you need to take if you are lagging behind. For example, your savings goals could be to bolster your savings portfolio, saving for emergencies, saving for your kids’ education or for a big purchase like a car.

Assess your financial standing: Review your financial standing by assessing your finances, which will help you get a better understanding of where you are in your financial journey. This will further help you get a clear understanding of your income and expenses. Moreover, it will also give you a clear indication on whether you are making adequate contributions on your savings.

Review savings goals and increase contributions: Review the savings goals that you set at the beginning of the year to check your progress. This will help track if you need to make extra contributions to ensure that you meet your goals and will also highlight where you spent unnecessarily. Increasing your contributions can help boost your savings, even if it is with a small amount.

Choose the right savings vehicle: It is advisable to balance between having an immediate access and getting access to your funds over a notice period. This will help ensure that you avoid paying penalty fees in instances where you have an emergency if you only save on notice accounts.

Furthermore, different savings vehicles offer different interests, for example, FNB offers accounts with interests up to 9.20% depending on the term and amount saved and up to 9.65% on the retiree’s value proposition.

mashabas@sowetan.co.za