Saving tips – what to look out for in your budget


You don’t save what’s left after spending. You spend what’s left after saving.

– Warren Buffet

While there may be a degree of uncertainty – both globally and locally – regarding the political, economic and social landscape, we as South Africans can empower ourselves through awareness and action to ensure our money still meets our life goals.

With fuel price increases, electricity hikes, medical aid inflation, food inflation against the backdrop of a slow economy, our businesses might not be able to give the above inflationary increases as we have seen in the past. Times are tough for all of us – we can either become despairing and complainers, or we can adjust our thinking and tweak our own financial plans.

Over the years, I have seen three basic tactics by which clients have reached financial freedom:

  1. their budget
  2. setting a lifestyle ceiling
  3. settling debt as quickly as possible

This article focuses on the first option: budgeting.

The cost of living, the desire to have the best and conspicuous consumerism make budgeting one of the biggest challenges in a financial plan … but it is also the area over which we have the most control.

Here are my proven ways to make your budget work well.

  • Decide how much you want to save every month, and build your budget from there – not the other way around! Clients that I have seen reach financial freedom have managed to “pay themselves first” through saving and investing for the future.
    30% of your net salary should be going towards savings. That leaves you with 70% to spend. This 30% includes your Pension and Provident Fund contributions. Thereafter, look at settling your debt, with your credit cards first and then your home loans. Then, you can spend what is left.
  • Separate your needs from your wants. Try to turn off the message of adverts and marketing companies, who want you to believe you need their products. My challenge is, for just one month, when you walk past store windows, ask yourself: do I want this or do I need it? If is not a need, walk away.
  • Annualise your expenses – convert monthly amounts (that may seem small) to yearly amounts, which gives you a more significant figure. Then ask:
    1. Do I actually need this?
    2. Can I rather pay upfront for this and save?
    3. Can I spend less on this?
  • Once you have figured out that you could save more and pay yourself more, there are different investment vehicles you could look at investing in. A popular choice is a Tax-free Savings Account – a long-term savings vehicle not to be confused with saving money in a bank account. Money in the bank is for short-term savings and emergencies. The benefits of a TFSA are: 
    • Investment remains liquid and accessible at all times
    • All capital growth, interest and dividends are tax free
    • Any withdrawals made will not trigger capital gains tax
    • Great way to have exposure to equities and offshore investments

When investing or saving in this structure, consider how it is invested in the vehicle. You can choose many different options, from cash portfolios to equity portfolios. Chat to your financial planner as your savings plan still needs to form part of a holistic financial portfolio.

Good luck with your budgeting! Please share with us your success stories or ideas.

Craig Turton is a Certified Financial Planner® and Wealth Creation Specialist at Chartered Wealth Solutions. He is committed to helping young people build their wealth through sound financial planning and healthy money habits. 

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