Savings Diet


“I think the biggest mistake is not learning the habits of saving properly early because saving is a habit”

SAVING is fundamental to the process of growing your wealth!

South Africans appear to not like the idea of saving, well at least not anymore. Savings as percentage of personal income back in 1980’s was around 8% and a quick sprint 30 years down line, savings as percentage of personal income is at -2%. This is mainly attributable to personal debt, vanity! Over the same period, the percentage of personal income used to pay off our vain ways (personal debt), has increased from 42% to 77%.  These numbers are depressing to say the least.


There are also a wide range of excuses that we use to avoid saving:

  • “I’m young. There is plenty of time to save later”
  • “What about government pension? I will just live off that when I retire”
  • “I deserve to have fun with my money today-I work hard for it.”
  • “The market is down, so why bother to invest in the JSE?”
  • “I will start saving when the market improves”
  • “I need to get my first car, the I can focus on saving”


All these excuses have a common theme. It is this wrong money philosophy that most of us share the “I will deal with it later” syndrome.


There is never a better time to start saving than today. Saving should be like a lifelong diet, forming part of your monthly financial obligations. Call it, paying yourself first. And not only when it suits you or when the “markets look safe”. Savings, similar to maintaining good health, requires sacrificing certain luxuries over the short-term, so you can benefit of good health over the long term.


Although most South African’s live from hand to mouth, incorporating a savings diet to monthly financial planning should still be done.  The ability to save has nothing to do with the size of income. Start small, make at a habit so that when your earning capability increases, it does so with your saving.


Here are a few pointers on how to save under challenging circumstances;

  • Trick yourself into saving and start early.
  • Control your expenses and do not let them control you!
  • Do not live above your pay grade. (Stay in your lane, forget the Joneses!)
  • Claim your taxes!
  • Reduce personal debt as quickly as possible.


This all sounds simple and straightforward, well that’s because it is, but the hardest part is getting started and having the discipline to do it over and over again (rinse repeat).


Consider setting a scheduled payment (on the day you get paid) from your cheque account into an investment or savings account to make make forming this good habit as painless as possible.


Once we achieve this discipline, we can use our savings to grow our wealth by investing in asset classes such as shares that will give us adequate returns for our hard-earned money over the long-term.


Saving is not easy, that’s the truth. But the idea of being able to survive on a government pension fund is impossible for most of us. So saving should be like a challenge that will help you live comfortably and financially sound in the future. Take this simple idea and take it seriously.


“A man without savings is always running. He must. He sits nervously on life’s chairs because any small emergency throws him into the hands of others. Without savings, a man must be grateful. Gratitude is a fine thing in its place. But a constant state of gratitude is a horrible place in which to live.”



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