10 practical ways to become a better saver

South Africans are not saving enough, and only 6% of them will be able to maintain their standard of living after retirement. Research by Trading Economics shows that, among the G20 countries, South Africa ranks the lowest in terms of household savings rates.

At the beginning of 2019, the ratio of household savings to disposable income was at 0.15%. Among working urban households in South Africa, 40% of people have no formal retirement savings.

What is the savings benchmark? 

The amount you should be saving will always depend on your goals, the time you have at your disposal and your ability to save, says Jan van der Merwe, head of actuarial and product at PSG Wealth.

"While each person's saving decision is unique, a simple rule of thumb provides a handy starting point to at least get you thinking along the right lines."

Guidelines for your after-tax income:

  • Allocate at least 15% of your pre-tax income to retirement savings;
  • Allocate 60% of the rest for necessities like housing, food and utilities;
  • Allocate 30% (of the 85% left after deducting the initial 15%) for discretionary spending like entertainment and luxuries;
  • Allocate 10% (of the 85% left after deducting the initial 15%) into discretionary savings, for instance education, an emergency fund and holidays;
  • Start saving small and gradually increase what you save each year;
  • Always adjust the amounts you save annually in line with inflation increases;
  • Keep a record of all the money you spend and compare it to your budget each month. This will help to point out where you need to make some adjustments to your spending;
  • Don't try to keep up with the Joneses;
  • Keep that old cell phone for a few more years, drive your car for a few more years, and remember that you don't always need the fanciest branded clothing;
  • Always preserve your retirement savings when you change jobs.

How quickly your savings could add up for different amounts:

savings

(Source: PSG)

We live in a world where facts and fiction get blurred
In times of uncertainty you need journalism you can trust. For 14 free days, you can have access to a world of in-depth analyses, investigative journalism, top opinions and a range of features. Journalism strengthens democracy. Invest in the future today. Thereafter you will be billed R75 per month. You can cancel anytime and if you cancel within 14 days you won't be billed. 
Subscribe to News24
Rand - Dollar
16.87
-1.3%
Rand - Pound
20.13
-0.3%
Rand - Euro
17.02
-0.4%
Rand - Aus dollar
11.67
-1.0%
Rand - Yen
0.12
-0.6%
Gold
1,759.58
-0.1%
Silver
19.57
-1.2%
Palladium
2,160.71
+0.8%
Platinum
915.51
-1.5%
Brent Crude
93.65
+1.4%
Top 40
64,184
+0.0%
All Share
71,011
+0.1%
Resource 10
63,890
+1.0%
Industrial 25
86,864
-0.7%
Financial 15
16,201
+0.3%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders