Saving a little is better than not saving at all – expert

Actor Govind Arun Ahuja, better known as Govinda, once said: “All of us start from zero. We take the right decision and become a hero.”

It all starts with making a decision. Whether it is to put 10c, 20c and 50c coins in your savings jar or open a savings account, you still need to make a decision and then start.

Many often think saving has to be in huge chunks but it is not.

Knowing your pockets is very important and having realistic savings targets is a bonus.

Thabo Qoako, Momentum Group Foundation consumer financial education specialist, says saving money is a critical skill that can improve your journey towards financial stability and security.

“Saving a little is better than not saving at all. Hence people should focus less on the amount and more on the regular practice of putting money away, because the changes in your behaviour that lead to a habit of saving are the most important part. There are simple ways to help you save and achieve personal financial goals; whether you’re planning for retirement, saving for a vacation, or building an emergency fund, adopting the right saving habits is important.”

Qoako says creating a consistent savings habit is not just about putting funds aside, it's about building a strong foundation for your financial future. Money is money, I always say to people.

There have been moments in my life when I’d been so broke and had no savings jar to go break to push through tough days. When I turned the corner, I never looked back.

The other day I counted my coins and had R17.50 made up of 10c, 20c and 50c. My R1, R2 and R5 coins stash amounted to R149.

It is not thousands but it is money. I can buy an essentials combo (bread, cheese, polony, eggs and margarine), selling for R99 each at a supermarket running a special and I'd still have R67.50 left.

See, money is money. Start taking your money seriously, make sound decisions and save it. The best time to start saving is today.

Qoako says when it comes to saving money, small changes can add up quickly.

“No matter your circumstances, there are plenty of simple ways you can save money. Without savings, even a small emergency can set you back financially,” says Qoako.

“Having an emergency fund comes in handy, should you have unplanned expenses – like medical bills, household maintenance, car repairs or loss of income. 

“The best time to start saving is right now. It is time South Africans find and dedicate their hard-earned money to reach their goals. But only a determined approach to budget planning and better awareness of your financial situation can help.”

Qoako shares tips to help you get started: 

Educate yourself: Continuously educate yourself about personal finance to make informed decisions about saving and investing. It is important to understand concepts like compound interest, different savings vehicles and risk management to help you optimise your savings strategy and make your money work harder for you. Always seek professional advice from a registered financial adviser.

Understand your circumstances: Understanding your circumstances allows you to work around what is relevant for you and what is not. From time to time, take stock of your circumstances to understand exactly where you are spending money – it is important to always discern whether your next purchase is a need or want, for example: do you really need that takeout or, can you do with a pre-prepped meal from your kitchen? Or, do you really need another nude lipstick or, can you make do with what is in your beauty bag already?

Set financial goals: Be realistic. Having taken account of your circumstances, establish personal financial goals. To be guided by informed decision-making, seek professional advice from a financial adviser to help you plan and achieve your personal and financial goals. This might include clearing debt, building an education fund, building your home, etc. Financial goals that are developed to address personalised goals are compelling. Apart from building specific, measurable, achievable, relevant and time-bound goals, there must also be a plan of action to achieve your goals. A tip to measure how you’re tracking against your goals would be to list what your goals are and, alongside list how you’re going to achieve this. Imagine the feeling of reaching your goal, like enjoying the pride that comes from owning your own home or watching your children graduate. List these goals down and get busy making them happen through your personalised plan of action.

Developing a realistic budget (and sticking to it): If you want to stay on top of your finances, it’s important to live within your means and focus on what matters. Start by making a budget that works for you. A handy way to approach this is with the 50/30/20 rule: allocate 50% of your income to needs like rent and groceries, 30% to wants such as dining out or entertainment and save the remaining 20%. Keeping track of where your money goes will give you a clearer picture of your spending habits and will help you pinpoint areas where you need to cut back.

Automate savings: Set up automatic transfers from your current account to your savings account to make saving a seamless experience. Along with everything you have to pay, think of saving as paying your future self as well. This helps eliminate the temptation to spend the money elsewhere and ensure consistent progress toward your savings goals.

Prioritise debt repayment: Prioritise paying off your debt, starting with high-interest debt, to free up more money for savings and improve your financial situation. Most importantly, focus on creating a debt repayment plan that allows you to allocate more funds towards savings once your debts are under control.

Build an emergency fund: Life is full of uncertainties, and unexpected financial setbacks can happen to anyone at any time. Having an emergency fund in place can provide you with the financial stability and peace of mind you need to navigate through these challenging situations.

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