More tips to power up your savings
No one needs large amounts of money to start saving towards a financial goals.
Number-cruncher Hildegard Wilson, a member of the actuarial society, has shown how cutting out just one guilty pleasure like the daily cuppa or quitting smoking can save consumers tens of thousands of rands.
And then there is the extra saving from lowered life insurance premiums and reduced health costs.
Wilson says that once you have implemented some small savings habits and seen how your money grows, it will be easier to keep finding ways to save more.
The investment actuary offers the following tips to apply as you continue on your savings journey:
Draw up a detailed budget: The real reason you may not be saving is that you may not be aware of how much you are actually spending. A detailed budget will help you understand where your money is going, and identify areas you could cut back.
Record your savings goals – and be specific: Think about the reasons you would like to save, and set yourself clear goals as a motivator to stay focused on your savings path. Quantify the amounts you would need, and be realistic about how much you must save to reach your goals.
Set yourself small challenges: Look for one area where you feel you are overspending. For example, research suggests that households may underestimate their grocery spending by as much as 20%. Set yourself a challenge to reduce your spending in this one area, one step at a time. Then rather than spending this money elsewhere, invest the money instead. Once you have conquered this challenge, look for the next place to reduce your spending.
Turn your hobby into extra income: With salaries already stretched, consider increasing your savings by turning hobbies such as baking and photography into an extra source of income.
Consult your financial adviser: A trusted financial adviser will be able to help you set measurable financial goals, and implement a comprehensive financial strategy to reach your goals. They will also be able to help you ensure that you are adequately protected against unexpected life events such as death or disability.
* It's National Savings Month.
