Every week Perdeby takes a look at something you should have learned at school to assist you in day-to-day life. This week, we take a brief look at the best ways to save money.
Open a Tax Free Savings Account
A tax free savings account (TFSA) is the government’s way of creating an incentive for people to save money over the by making sure that no tax is charged on dividends, interest or capital gains earned from this particular type of account as long as the amount saved in the account does not exceed R33 000 per tax year. There is alsoa R500 000life time limit per person. TFSAs are available through many financial institutions in South Africa, and many have a minimum monthly deposit of R500 to the account. This not only puts more money into your savings, this is a plan that works better psychologically as you won’t see your money sitting in your bank account and be tempted to spend it.
The 2 Litre Ice Cream Challenge
While the thought of ice cream leading to big savings may seem paradoxical, your next empty 2 litre of Tin Roof after a rom-com binge watch may help you save quite a few of your coins. This challenge harnesses the power of the everyday coins we mindlessly spend on the little things throughout the entire year by compelling you to fill it up over time. It works by supergluing the lid to the container and only creating an opening small enough to push through coins. This challenge may not be best for those who are easily tempted by McDonald’s Big Mac and have an inclination towards cutting open their savings to satisfy their cravings.
Open a Thirty Two Day notice account or fixed savings account
Take advantage of your bank’s savings facilities by opening a thirty two day notice or fixed savings account in conjunction with your current account. A thirty two day notice account is the best option for those with little discipline, a plan that makes your money inaccessible for any unplanned emergency cravings that may strike at two a.m. This savings option is best for when saving towards a fixed goal that has a determinable timeline. A fixed savings account works similarly in that your money is inaccessible for the amount of time you specified, however, depending on the bank, you may be able to access the funds with either a visit to the branch or a call to the call centre.
The 26/52Week Savings Challenge
The 26/52 week savings challenge is a savings challenge that uses the number of weeks within the year to help participants commit to saving more of their money. While the 52 week challenge that can help you save almost R14000 a year for students may be quite steep, the 26 bi-weekly savings challenge may be just the thing for you. The challenge works by slowing increasing the amount you save. To start the challenge, you need to mark the week you begin your savings journey by depositing R10 in the first week, R20 in the third week (skipping between weeks to ensure affordability), R30 in the fifth week until the end of the twelve months since you began your savings journey, hopefully keeping on track and saving up to R7000 or more with interest.
Image: Sally Hartzenberg