The South African economy has experienced some troubling economic shifts over the past week. It's now more important than ever to take control of your finances and build a better financial future with economic turmoil always around the corner.
This is one of our main reasons for building the MyFincheck Finance Tool and the Fincheck platform - to help South Africans be better prepared with their finances.
The great news is that we've seen many people sign up over the past two weeks to enjoy the benefit of a tool that can help them make better finance decisions!
Why do those decisions matter? Well, because those decisions are the foundation for a better financial future for each of us.
In this specific post, we're talking about FEATURE 5 listed below. We'll start linking back to each article (as we post it) in the list below so you can easily navigate to all the features:
- Fincheck releases MyFincheck Finance Tool
- FEATURE 1 Bank Level Security Assurance & Notifications
- FEATURE 2 Your Personal Financial Dashboard Overview
- FEATURE 3 Understanding your income, expense & expense ratio
- FEATURE 4 See your Cash Flow with the Transactions Window
- FEATURE 5 Save towards a better financial future with your own Savings Window (Current post)
- FEATURE 6 Your Credit Window will help you keep track of credit card spending
- FEATURE 7 Take control of debt with your FREE Credit Score & Loan Account Window
Why is savings so important and why do we have a savings tab on your personal finance tool?
The reality is, there can't be a better financial future if you don't put money towards it. With the ability to edit or label the right transactions as "Savings", you can see how much money you are saving every month. This allows for a very important thing in life: measuring where you are with your savings goals. The tool will help you:
- Take stock of your current savings
- Measure how well your savings goals are being met
- See how much of your monthly income goes towards your savings
We'll also help you choose the right savings products once we learn more about your financial profile! To help you get started with your savings tab, we've put together some savings tips that will help you make your savings tab your highest number ;)
5 Savings Tips for a Better Financial Future
1. Savings first, spending second.
Always remember that the more you buy things you don't need, the more you could end up where you need to sell the things you DO need. This is because you won't have ICE (IN CASE OF EMERGENCY) or savings accounts to lean on.
Set debit orders for savings amounts to go off first thing in the month before you start spending "extra" cash flow. Or practice the discipline to first put money into your savings before you start spending money.
2. Set your goals
Saving without a savings goal is like trying to walk to a destination blindfolded. You might get there. But you most probably won't. Start allocating a savings goal for each account instead of just thinking "as much as possible". For example, set a goal to save R10,000 by the end of the year for your ICE account.
3. Diversify your savings accounts
There's a reason why so many investors and risk managers tell you not to put all your eggs in one basket. This is especially true if you're new to investing or saving your money in an account that can earn interest.
The research can be overwhelming, so choose a couple of savings accounts that offer the benefits you're looking for over different investment terms. Put some money in each (depending on the minimum balance) and keep an eye on the growth. This is where you can start measuring results over certain time periods and allocate your eggs to the baskets that work for you.
4. Don't wait until your debt is paid off
This is probably one of the biggest mistakes and misconceptions in the savings/investment industry. Many people think it's best to first pay off all their debt before they can start saving money. The reality is that many people only effectively pay off their debt (home loans, personal loans, student loans, car loans, etc.) in their "after 40" years.
So rather than waiting until then - which is much too late to enjoy the benefits of compound interest - start sooner, even if it is a small amount now.
Allocate a small amount (many banks and companies offer accounts that only need R200 per month to be debited from your account) that will go off AFTER your debt payments, but BEFORE your luxury spending habits.
This means you keep on chipping away at your debt, but you also build your future savings. You'll be amazed at what a monthly R200 can become in 40+ years along with compound interest! And remember, your ceiling isn't a small amount of R200 a month. As your income increases, you can increase your saving amounts!
5. Increase your savings incrementally
As we hinted in the last sentence from our previous tip, your savings amounts will increase over the years. This is because most people experience growth in some form when it comes to their monthly income.
We are, of course, referring to the growth above and beyond increases that cover inflation. If you work hard and seek out opportunities, your income will eventually start increasing.
The trick is to allocate these extra bits of income to your savings first! Instead of improving a lifestyle to the point of luxury. Then look at how to pay off your debt quicker and THEN only at how you can improve your lifestyle.
The above is only a guideline, as there are countless tactics to balance savings, loan payments and lifestyle costs. The ultimate question to ask yourself is how soon you want to be able to 'retire' and what lifestyle experiences you are willing to sacrifice to get there?
6. Bonus tip - create more sources of income
Are you frustrated with the growth of your savings? It might be time to look at more ways of creating income so that you can push more into savings and future opportunities.
South Africa is brimming over with economic opportunity despite all its political upheaval. Everyday people who pursue work opportunities and are willing to service needs in the country will stimulate the economy and create more opportunities for those around them.
There are more ways to create income than can be covered in this post. So, our suggestion is to ask yourself one question: "What needs do people have around me, that I can solve, and are they willing to pay for the solution to those needs?". The answer to that will give you a source of income.
Let's cheers to your better financial future!
We're so excited and happy to have you part of this awesome release! If you had fun reading this post, and would like to share it with a friend, please send them the link and encourage them to sign up.
If you haven't signed up for MyFincheck, you can do it here.
Remember to sign-up for post updates below - we'll keep you posted!