For many, it seems close to impossible to save. This is often due to poor financial planning.
Justmoney takes a look at the best ways you can save during the short term.
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2. Notice deposit accounts
This account allows consumers to deposit between R200 to R1,000 into a notice account for a definitive notice period. This period then determines how quickly you can withdraw the funds. This is further determined by the interest rates offered by the bank of your choice.
According to an Absa in-branch consultant notice accounts are one of the best options if you want to save for a short period while earning decent interest.
Do your homework and choose a savings vehicle that’s best suited for the period you want to invest for, as well as the amount you want to invest. Various banks have different interest tiers that can be accessed through investing certain amounts of money for certain periods.
2. Flexi-fixed deposit
While this style of saving is typically more suited for lump-sum savings, it allows you to systematically withdraw your money in certain increments. This encourages you to spend it wisely instead of impulsively.
Here you have the option of depositing funds any time you please while making limited withdrawals of up to 15%. Interest is also determined by the chosen investment period and is offered in a tiered system that can range between 2.25 – 4.5%.
Ensure that the investment periods allow for when you need to access your money.
Consider the following savings tips
Other tips to be mindful of when saving over a short-term period are the following:
1. Choose your saving tool correctly: Saving is usually geared towards a specific goal. For this reason, before deciding which savings tool you want to utilise, ensure that the tool is best suited to the amount and time specifications you’re aiming for.
2. Budget correctly: Before tackling a savings plan it's important you understand how much money you want to save and then plan accordingly.
According to the Absa consultant, the key to budgeting correctly is being realistic about how much you can afford to save. Many people start out in savings vehicles and soon give up because they can’t afford the financial commitment.
3. Put a stop-order in place: Saving requires discipline. If you’re concerned about the commitment put a stop-order in place.
A stop-order ensures that you’re actively saving each month without having to think about it. You simply set the date, stipulate the amount and it acts as an automatic debit order.
4. Use cash instead of credit: While you may be tempted to swipe your credit card, it’s better to use cash. It will help you keep track of your expenses. You’ll also save on the interest fees associated with buying on credit. The Absa consultant has the following advice: “Make a rule that if you can’t afford to buy an item in cash, then don’t buy it at all.”
5. Appoint a buddy: Find someone you trust to help keep you accountable. This means checking whether you’re actively saving and also ensuring that you don’t splurge your savings at any time.
While it may be hard to open up to someone about your finances, it can help greatly in keeping you on track.
It’s always a good idea to have a savings plan that you’re actively following. This ensures that should anything unexpected arise that may put financial strain on your cash flow, you’ll be covered.
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