Supplementary Budget 2020

WATCH: How to save on tax in an investment plan

Johannesburg - The start of a good financial plan is not to react to tax hike announcements, but to match your income and your expenditure, says Errol Meyer, Head of Advisory Services at Standard Bank Financial Consulting.

Tax increases are almost always expected in the Budget Speech, and usually there's a knee-jerk reaction from consumers: “Where can I get the best tax efficient investment?"

That is not always a good place to start, cautions Meyer.

According to Meyer, budget speeches are about the income and expenditure that needs to balance. "We need to do the same for households. We need to match our income and our expenditure. Our expenditure could be long-term, short-term or medium term – and that’s where we start."

Meyer points out that compound growth is the real value when it comes to investment.

Consumers must also not forget that to pay off your debt is a very good strategy, Meyer advises.

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