What to do with your savings
Everyone knows having a savings account is important. Yet, maintaining one is difficult given our everyday expenses and our income. Most of us are not millionaires who have a safety-net when it comes to earning. We’re trying to do the best we can with what we have.
We should consider some options for saving because we will need it, no matter how difficult it may seem. After all, just because it’s hard doesn’t mean we shouldn’t try.
Consider your long-term investments
It would be wonderful if our money could do the work itself. This is why we’d like investments to work well. One obvious investment is retirement annuity. They operate as a container of sorts, packaging in a number of investments in shares, property, bonds and cash.
As CapeTalk highlights:
“You can make ad hoc payments whenever you have extra money to invest or regular, set contributions (e.g. monthly, quarterly, etc.).
“When you turn 55 it pays you a lump sum (of which a large part is tax free and the rest is taxed at a very favourable rate) with a portion of the total value of your RA while the rest buys you a monthly income.”
The government actively encourages this, by letting you deduct contributions up to 27.5 percent of gross income to a RA from taxable earnings. This significantly reduces how much you pay to the government. Or, viewed another way, this greatly increases how much you get to keep of your earnings.
Other investments can also save you, such as government retail bonds, which earn a fixed interest for the term of the investment and offers guaranteed returns.
Everyday saving behaviours
It’s also important to consider how your everyday behaviour affects general saving. You need to question the merits of acquiring an item: Is it something you want or something you need? Saving is all about recognising you can’t acquire everything and anything you want, since there will always be priorities money can go into. You could get the latest iPhone or you could save that amount every month into an account.
When making expensive payments decisions, you must consider necessity versus desire. This is guaranteed to improve your purchasing decisions. Additionally, there are almost always cheaper alternatives (whether that means second-hand, waiting for a sale, and so on).
It’s also important to consider what items we use daily and how we can use them better. There are ways to drive more efficiently, using less petrol and lowering our car maintenance costs. We can find cheaper and greener alternatives to electric devices. Instead of using an electric dryer requiring a lot of electricity, raising our monthly bills, why not get an outside clothes line?
There are all sorts of small ways, which take a moment or two to consider, which will have long-term saving benefits.