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Saving for a rainy day

Posted: 16 Nov 2015

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Why save?

All of us, if we like to admit it or not, would love to be able to predict the future; to know exactly what lies ahead. Sadly, that’s impossible! We can never predict the future, but we can make provision for such unplanned occurrences by saving a little every month. Many of us are under the impression that you need to save thousands of rands every month to be able to build up sufficient savings and therefore we get discouraged. The truth is though, that you only need to save between 10-20% of your annual income. Apart from saving each month, you should aim to have at least 3 months of salary in your savings account to be prepared for a loss of income or a major emergency. Everyone is able to save. Even the smallest amount each month can make the biggest difference in future. It is more about growing the habit than the amount that you put away. As you grow financially stronger, you will be able to put away more and more every month. You are not always able to control what funds you get in, but you are able to regulate what you spend. By spending less than you earn and making small cut backs on expenses, you can help yourself to have that little extra a month to put away.

Benefits of saving monthly:

  • Get peace of mind. You’ll know that you have extra money saved for unforeseen circumstances.
  • Prepare for retirement with confidence. By saving 20% of your annual income you will be able to retire comfortably.
  • Save for what you want. There won’t be unnecessary costs and you’ll appreciate it so much more.
  • Save for your children’s education even before you have them. It only gets more expensive every year.
  • Disciplined saving habits will allow you to afford the things you want, such as a house or a car.
  • Save to afford that overseas holiday that you always wanted to take!
  • Afford the luxury items you’ve always dreamed of! You simply have to set a goal and SAVE.

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