5 Savings tricks financial advisors swear by

5 Savings tricks financial advisors swear by

Get expert advice that’ll put you on track for financial happiness.

1 Start an ‘emergency’ fund

“Be aware of the time value of money,” says certified and principal financial advisor, Michael Atti. “Contribute to a unit trust as a ‘money box option’ of saving that you can access within a couple of days if you have an emergency.”

2 Take advantage of tax-free savings plans

“These are limited to R33 000 per year, with a lifetime cap of R500 000,” explains Atti. But they can save you significant portions in tax each year – well worth taking advantage of. Still got more cash to stash away, but reach your tax-free limit? “Choose other investment options to boost your savings,” says Atti.

Speak to your adviser to find out the best tax-free options suited to your spend and needs.

3 Protect savings against creditors via an endowment

Advises Atti: “In addition to tax savings, an endowment has added advantages such as simplified tax administration (since tax is recovered within the endowment and taken care of on behalf of the investor) and insolvency protection (the entire value of the policy will be protected against creditors after three years).”

4 Consider a Retirement Annuity (RA)

Retirement annuities are ideal vehicles for your long-term, pension savings – and they come with tax-free benefits, too. “Investing in an RA will assist you in maintaining your standard of living long after you’ve stopped working,” says Atti.

5 Don’t forget about the power of compound interest

It’s amazing to watch your money grow, without doing anything: you save some money, it earns interest, then your money + the interest earns more interest, and so on…. Soon, the amount you’ve got saved is growing exponentially – without you necessarily contributing more to your savings fund. Easy!

“Once you realise the power of compound interest, it’s easy to become ‘hooked’ on saving,” says Atti. “This helps you save as much as possible, consistently, by reinvesting whatever interest or growth you get on your savings – which will bring you further growth on both your interest and investment. The sooner you start saving, the sooner compound interest will start working for you!”

Get personalised, expert financial advice – and earn 8 000 tier points! – by making an appointment to speak to a financial advisor today. Click here to request a visit.

Want to learn more?

We send out regular emails packed with useful advice, ideas and tips on everything from saving and investing to budgeting and tax. If you're a Sanlam Reality member and not receiving these emails, update your contact details now.

Update Now