How to save when you have little disposable income

How to save when you have little disposable income
How to save when you have little disposable income

More often than not, we feel like we have very little money to spend, let alone to save. We end up getting ourselves into serious debt and buying things we cannot afford, and not having any money left for those emergencies that sneak up on us.

CEO of CG Private Wealth, Travys Wilkins, says saving is important for many reasons, including retirement. “Retirement remains one of South Africa’s biggest financial challenges. A large number of people have not saved up enough money to retire comfortably, or at all,” says Wilkins. Even when it is for things that seem to be most important, saving is still a problem. The number one excuse given for not saving is “I don’t have enough money to save”. 

We asked finance guru, Wilkins, the following questions to get more clarity on how we can start saving even when we do not have enough money.

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Why are people not saving? 

“It’s expensive to survive on a monthly basis, let alone put money aside. Many people live beyond their means, with the perception that they earn more than they do and that their money should go further than it does. Sadly, this ‘large living’ means a zero savings mentality and no future planning,” says Wilkins. He emphasises that trying to live the “high life" is what is making us feel like we have no money to put aside for saving. 

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How does one save with very little disposable income? 

Wilkins advises that people should live within their means, follow a strict budget, and remove their savings portion as soon as they are paid. “Another easy way to allocate funds to savings is to review your monthly subscriptions and payments and eliminate unnecessary or indulgent expenses. Review things like mobile phone contracts, paid-television subscriptions and fitness-related memberships,” he says. Yes, it also means that gym membership you pay for, but don’t use! 

He continues,“Don’t borrow money for the sake of living! The more you borrow, the more you may have immediately, but consider the amount you’re then committed to repaying every month and how this dents your disposable income.”

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