Your savings checklist

Every decade of your life is a chance to grow your wealth. As soon as you receive your first salary, you should be saving whatever you can spare. Saving is a smart way of managing your money and growing your wealth. The only way you can get better at saving is if you make it (and budgeting) a habit. Here’s a checklist of what you should be doing at every stage of your life.

In your 20s

You’ve probably started your first job. You might not be making loads but there’s no better time to start saving, even if it’s R100 a month. Whatever debt you owe now – student loans, for example – get rid of them quickly. Then use that money you would have spent on debt to increase your savings. Think how much you’ll have later on to get your dream car or house. On the subject of houses, it will be worth doing your sums to work out whether you should pay rent for accommodation or rather apply for a home loan and pay off a bond instead. This is also the time to learn to budget so it gets easier with time.

In your 30s

You want to grow your wealth. If you haven’t started saving for retirement yet, it’s time to catch up. It’s important to know what you’re saving for to make sure you’re putting away enough to match your future goals. This savings calculator will help. And if you decided to rent instead of buy in your 20s, you might now be looking at buying a house. If you’re changing jobs and earning more along the way, save that extra cash. Use it to pay off your bond faster, deposit it into a savings account or retirement plan. And avoid the mistake of cashing out your pension when you leave a job and spending it. It’s best to save it in another fund.

In your 40s

The 30s have probably given you a taste of increasing financial commitments – children, schooling, home loans and the general cost of living. By your 40s, these money pressures won’t be easing off. Paying off your ​home loan, saving for your children’s education and keeping enough for ​day-to-day expenditure is a careful balancing act – which is why you need to draw up a realistic ​budget to manage your income and expenditure. You might want that fancy new SUV, but can you ​really afford it? Here are other ways to cut back, on anything from ​school fees to ​shopping. And now it’s even more important to pay attention to your retirement savings. If you started late or put in too little, a financial adviser can help you plan how to catch up.

In your 50s

You’re getting closer and closer to retirement, so it’s the right time to top up your savings and review investments (have you paid off your house yet?). Some of your expenses – your children’s university expenses, for example – might be more than you’ve estimated. Find smarter ways of living with less. Here are ​6 easy ways to save. And you’re far from being over the hill, so what about taking on a second job or creating an extra income stream? See what ​running a business on the side can help you achieve.

60s and beyond

If all goes well, your years of hard work and financial discipline should start paying off in this decade. You’ll have other expenses in your old age – health care costs will go up, for example – so make sure that you have enough in that pot. On the other hand, you might have paid off your house and the kids will hopefully have flown the nest – so if you’ve planned properly, your monthly needs will be less than in previous decades.

Source: Capitec