YOUR MONEY | Three ways to save successfully

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(Photo: GALLO IMAGES/GETTY IMAGES)
(Photo: GALLO IMAGES/GETTY IMAGES)

If you’re struggling to save, there are steps you can take to get into the habit. Here are three simple savings challenges that don’t require you to set aside massive amounts of money.

THE 52-WEEK MONEY CHALLENGE

With this plan, you save a little more each week than you did the previous week. For example, if you saved R10 in the first week, you save R20 in the second week.

By Week 5 you’ll be setting aside R50 and so forth – until, by the end of the year, you’ll have saved R13 780.

As you’re saving weekly, it’ll become easier to make a habit of it. For many people it’s also simpler to save weekly instead of setting aside a large amount of money once a month.

How to get started:

Write out all 52 weeks of the year on a spreadsheet or print them out on a single page – there are charts on the internet you can use. Then fill in how much you want to save each week and tick it off as you go along.

You can start now and do it for 12 months or you can do it for the rest of the calendar year.

Open a savings account just for this money – some banks, such as Capitec with its Global­One account or TymeBank with its GoalSave account – offer these types of separate savings accounts as part of your primary account.

Or save it somewhere else where you don’t have easy access to the money. Cash in a jar isn’t a good idea as it’s too easy to get to when you’re in a bind. And once you start borrowing from yourself it becomes a slippery slope.

Remind yourself to save by, for example, setting a reminder on your phone.

Make adjustments:

The starting amount doesn’t have to be R10. If you start with just R1 a week, you can still save R1 378 by the end of 12 months. If you start with R5 a week, you’ll have R6 790 after a year.

You don’t have to start in January – your savings year can start at any time.

Each week think of ways to make your saving possible. You might consider selling handy items you never use.

Some people find it easier to start with the largest amount. So instead of starting with R10 in Week 1 and increasing the weekly amount by R10, you can start Week 1 with R520 and set aside R10 less each week.

Another option is to save as cash becomes available.

For example, if you have R410 available, tick off Week 41 and if money is tight the following week, you could put away Week 9’s R90, for example.

Do this until you’ve checked off each week’s target amount.

SAVINGS CLUBS (aka stokvels)

This is a tried and tested solution for many who struggle to save. It works because members encourage one another.

How to get started:

  Join a stokvel or start one with a group of trusted friends.

Agree on how much each member will contribute monthly. If everyone contributes the same amount, it’s easier to divide the savings (and the interest on savings) fairly among the members.

You can decide when it should pay out, for example that everyone gets their share at the end of the year.

Or you might decide that members take turns to receive the full amount in a month. For example, if there are six members and everyone contributes R100 a month, Member A will get R600 in the first month, Member B will get R600 in the second month, and so on until everyone has received their fair share.

Put rules in place, for example about who keeps track of the contributions and what happens if a member decides to leave the group.

If you’re only going to pay out after a set period – say, a year – you need to have a separate bank account for this money. Some banks have stokvel accounts for this purpose but be sure to compare banking fees and interest rates before choosing one.

THE 10C CHALLENGE

Bright Khumalo, a financial analyst, has garnered quite a social media following thanks to his saving challenge. His strategy is super-simple. You start your savings year with 10c, then increase that amount by 10c every day.

With 365 days in the year, the largest daily savings amount is R36,50. Thanks to compound interest, he saved nearly R7 000 this way in 2019.

How to get started:

Use a wall calendar or your phone’s calendar to tick off the savings days. For example, on Day 1 you save 10c, on Day 2 it’s 20c, and on Day 3 it’s 30c. By Day 100 you’ll be on R10 a day and by Day 200 it will be R20.

If you want, you can change the daily amount to 50c or even R1. In 2020, Khumalo started with R1 and ended up saving almost R70 000.

Open a bank account specifically for this money so you’re not tempted to spend it. 

TIP

 
Some people do the 52-week challenge by saving a weekly amount corresponding to each week’s maximum temperature. Depending on where you live and the season, this can get quite interesting. Make sure you keep track of the amounts you’re saving.

GET HELP

The South African Savings Institute: www.savingsinstitute.co.za

The Financial Sector Conduct Authority’s Consumer Education site: www.fscamymoney.co.za

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