Who would have thought that a pandemic would have struck our beloved planet, but it has, and now many people are destitute, hungry and unemployed.
Many people in South Africa live in poverty. According to StatsSA, “… the Living Conditions Survey (LCS) 2014/15, there were 35,1 million adults (aged 18 years and older) in South Africa in 2015. When looking at the poverty headcount by sex using the UBPL (upper bound poverty line), adult males and females experienced a headcount of 46,1% and 52,0%, respectively. Adult females experienced higher levels of poverty when compared to their male counterparts, regardless of the poverty line used.” Employment fell by 2.2 million to 14.1 million due to the pandemic.
I’m sure you’ve heard people say that it’s important to save money and they’re right, it is. Saving money is like a lifeline, it pulls you out of deep waters when you seem to be drowning.
It’s really important to save money for various reasons, especially for emergencies such as this – the pandemic. Many people have lost their jobs and could never have foreseen it. For those who saved money they had something to fall back onto whereas others were left without any form of income.
There are also many other reasons to save money, including wanting to save up for big purchases like buying a house or car. Many people dream of owning a home and car someday, but it becomes all the more difficult when we don’t save for it because these big purchases are incredibly expensive.
Saving money is also important for financial independence; the more you save the more freedom you have to know that you’re financially stable and you’re able to spend more. Saving money also helps to reduce stress because you know that when an emergency arises you’ll be able to take care of it.
I’m a 23-year-old woman and I’ve learnt a lot from my parents, friends and the pandemic about saving money. These are a few tips that could help you in your saving journey.
Tips to save money:
Open a savings account where you don’t have access to the money. This is basically opening a savings account where you need to wait 32 days or more, depending on your bank, to have access to your money. Why? Because if you access to the money you’ll be more likely to dip into the funds which defeats the purpose of you saving in the first place.
Create a budget. For instance, I include my savings amount within my expenses. So my expenses would be rent, internet, food and savings. Whatever is left over is money that I can potentially spend on a nice dress that I saw or on some lovely hair products. Sometimes if I have money left at the end of the month, I add that to my savings as well. I also create a spending budget of R1000 per month. This really helps me to limit my unnecessary spending habits.
It’s easier for me to have my budget in writing so I use a spreadsheet for my budget. You can use an app if that’s more convenient as there are loads of budget friendly apps, like 22seven.
Some people even opt for putting 10% of their salary towards savings. So let’s say you earn R3000, you’ll save R300 every month. This could really help to decide whether you’re saving the right amount or whether you could actually save more!
Have a goal in mind. So I want to travel abroad next year and obviously that costs a lot of money so I have to be strict with my budget.
Set up a debit order. A debit order is basically an agreement between you and a third party, let’s say your phone company. So you give permission for the phone company to take a certain agreed upon amount every month from your bank account to pay off your phone contract. If you really want to be strict with your budget set up a debit order for every month. So as soon as I get paid my savings amount is taken from my account and put into my savings. Some people might not like this option but it really does work for me.
Don’t spend money you do not have. Many people are prone to buying things they cannot afford. For instance why buy a R700 pair of shoes when you can buy cheaper ones and save the rest? Once you are financially stable then you can start spending as you please.
There is no easy way to save or receive money. During lockdown I’ve come across many ‘stokvels’. Yes, there are legit stokvels that really do work but then there are the ones that are simply pyramid schemes. Be wise and don’t fall for the possibility of making quick money. The saying, ‘When it’s too good to be true then it usually is’ reigns true for getting rich quickly.
Money doesn’t last forever, and neither does your job in certain cases. We have to prepare for the inevitable, we have to secure our future somehow. Saving money is in some way a saving grace. Yes, it is difficult to save money but even if you start by saving a little per month, it will help in the long run.
Always save when you can. As Robert Kiyosaki, famous American businessman, says, “Financial independence is about having more choices.”
Want to learn more about why Africans are natural-born mathematicians? Read about it here
Tell us: Why do you think saving money is important?