We are now well into January, which makes it fitting to consider just how to make the best of that first and long-awaited salary.
Previous generations were able to save with much greater ease, and perhaps even save a higher percentage of their earnings, compared to us. Just a generation or two ago, it was far more common for only men to bring home the bacon, but today we see many households with two incomes.
While we can attribute some of the shortfall to higher expenses as part of a changing lifestyle and having many more avenues to spend today, the question still remains: are we trying hard enough to save? The answer is probably not.
Jo-Anne Bailey, director & country manager for Franklin Templeton Investments offers a few simple saving tips:
- Spend what is left after saving rather than save what is left after spending
This is one of Warren Buffet’s famous quotes and a good starting point to saving more. In order to do this, start documenting your income and expense details to calculate monthly saving. This way you know exactly how much you save and can also pinpoint some expenses that can be cut down even further.
- Control online spends
There is an online retail explosion in the South Africa. Many of us are guilty and find it difficult to not take advantage of the convenience and discounts of online purchases. But while convenient, online buying can result in buying stuff you don’t actually need! Ask yourself these questions before your next online purchase to help you decide if you should go ahead with the purchase or not:
- Is it an impulsive buy just because there is a discount?
- How often are you going to use the new product?
- Is life going to change much if you decide to postpone the purchase?
- Pay off your expensive loans
Out of your liabilities, check those that carry a higher interest rate, like credit card dues and personal loans, and pay them off first. Paying things off quicker means you’ll save on the interest fees.
- Save on car insurance
Many people don’t revise their car insurance policy’s each year, but when your car gets older its value decreases, which means you should be saving on insurance, not getting a premium increase. Check with your insurer or get new quotes from others. Every little saving helps.
- Check out various tax-saving options
Any tax saved can add to your savings kitty. Some companies offer flexible salary structures to save taxes. Once you’ve cut down spending and increased your saving potential, it is important to deploy these savings in inflation-beating investment avenues. A mutual fund investment is one avenue that will help you to achieve long-term goals through consistent, disciplined investing.
Source: Franklin Templeton Investments. Image: Pixabay