Savings is investing in yourself
Lephoi Mokgatle, Head of Product from Momentum Money
The rising costs of living coupled with an economy in recovery has most South Africans wondering: How are we supposed to save any money? Although saving or investing can sound intimidating, Lephoi Mokgatle from Momentum Money says there are ways and means of getting it done.
Martin Luther King Jnr once said that “You don’t have to see the whole staircase, just take the first step” and that holds true in the world of savings and investments. Mokgatle suggests that anyone with access to income on a fortnightly, monthly, or annual basis has an option to invest or save to build a more robust, financially stable future. “A savings plan does not need to be a substantial monthly expense. Even the smallest amount saved over time can build into meaningful returns,” says Mokgatle.
While economic recovery is evident post the rolling lockdowns of 2020/2021, many South Africans are still feeling the aftereffects. According to the latest Momentum/Unisa Consumer Financial Vulnerability Index (CFVI), savings vulnerability levels increased in the second quarter of 2022. This could mostly be attributed to a strong decline in the savings consumers had available for emergencies. It is clear that South Africans are struggling to save.
Mokgatle offers four tips that can help make small but significant steps to achieving your savings goals.
Create and visualise the future you’d like to see
Write down in detail what it is you are saving or investing for. Be clear and deliberate about your objectives and set a timeline to achieve these goals. Consider and articulate the feelings and hopes that will be realised once you achieve these goals. The plan could be broken down into weekly goals or daily goals that build up to a month-on-month execution.
“A financial adviser is the best option to include in your planning to help you lay down realistic and attainable goals that work with your living expenses and net income,” says Mokgatle. “Or if you feel you’d like to begin the journey on your own, start by saving what you can with a solution like Momentum Money that offers a straightforward and barrier-free access to the world of savings and investments.”
Start managing debt as you would like to manage your income
The South African spending culture is increasingly spiralling upwards at the same pace as debt since most Africans resort to loans to pay off existing debts or make ends meet in the household.
Mokgatle says that it is essential that we keep a record of how much we spend and how much debt has been accumulated over x period of months. “Keeping track of this expense in your budget will help highlight what needs to be reduced and what needs to be cut off to allow more cash flow to save or invest.”
The art of passive income
According to Forbes Advisor, passive income is money you can earn without too much effort. Passive incomes include investing, asset building, and asset sharing. “Passive income is a great way to make an extra income without working too hard,” Mokgatle advises.
Explore your savings options
There are numerous savings accounts and investment options. Shop around and make sure you are choosing a saving option that is aligned with your savings plan and offers benefits. Your financial adviser will also be able to advise you on opportunities that are suitable for you.
“Making yourself a priority will always be necessary. Start investing in yourself today to make your journey to success even smoother,” concludes Mokgatle.
ENDS
