10 money savings New Year resolutions

Jan 5, 2021. Harry Welby-Cooke

It’s January and I know regret is slowly creeping in. Not only did you not make nearly enough money last year; you also spent pretty much all of it.

As if the year wasn’t long enough you then got paid earlier than usual in December, bought presents, had parties and off-course had to celebrate in the new year and now you’re …. well broke. Payday has never seemed so far away and you cannot believe this has happened to you again.

Whilst you’re sadly also very human, there is definitely a much better way to do things. Instead of just hitting the repeat button each year let’s rather focus on some practical steps you can take to create brand new money saving resolutions for 2021.

1. Start saving something small today

Take out your smartphone and open your banking app. Transfer something, anything, from your normal transaction account to your linked savings or investment account. Take a moment and do it now. What does that feel like? Often whilst we wait to have enough to save R1,000 at a time we’ve missed years of trying to save R100. Don’t wait for big chunks and rather start with little bite size ones. The regularity of saving is much more important than once off big amounts.

2. Don’t pay off your debt first

Forget the logic that says you should first pay off your debt before saving. Yes theoretically that’s correct but practically that advice sucks. How many times have you paid off your credit card only to find there is a new balance before you ever got to your saving goal? It doesn’t matter if you’re paying more interest on your debt than you’re receiving on your savings. You need to start saving and get into that habit. We’re emotional beings and logic sadly doesn’t feature often enough in our money habits. Whilst you’re still paying off debt you can still get going on your savings.

3. Get your PhD in loyalty programs

Yes that multitude of plastic you carry around with you can actually add significantly to your savings. Put the TV off for a day or three and spend the evenings understanding what your existing loyalty programs actually mean for you. If there is one or two you’ve been considering, and haven’t yet signed up for, do that now as well. You can literally be saving tens of thousands of Rands each year just by making small changes in where, when and how you spend your hard earned money. The more you save on spending, the more there is available for actual saving.

4. Quarterly increases

Starting any new routine takes a while to get into but after 3 months it’s a lot more comfortable. Set yourself the goal of slightly increasing your monthly savings amount every quarter. Even if it’s just a 5% increase every quarter you’ll be saving 21,5% more the same time next year. The regular increases also ‘force’ you to constantly review where you’re spending money and where you can save more. The first few quarters are very easy so start with that.

5. Emergency, short, medium and long-term

We all have a variety of savings needs and it’s really difficult to be investing in property, retirement funding and shares when you don’t even have an emergency fund. Start by getting your Emergency Fund sorted and work towards around R10,000 in a low interest account: like a savings or money market account. Now you’re ready for some short-term savings and perhaps a notice deposit account is great. As you move to medium savings a longer term investment becomes more applicable and then you’re ready for things like retirement, shares etc. The road to true wealth is not paved with get rich quick schemes. If you take it one step at a time you’re also more likely to learn the necessary skills required and not end up being duped out of your hard earned cash.

6. Rethink transport

A massive cost for anyone today is transport. Whether you catch a minibus taxi to work or drive there in your Rolls Royce, the costs are only going one way. Reconsider how you move around and explore options like actually cycling to work, lift clubs, ride sharing, public transport, electric scooters and anything else that is going to bring you a saving. Our obsession with owning big gas guzzling cars needs to change. The potential savings on transport alone will massively change your financial outlook for the year ahead.

7. Only shop on sales, with vouchers, discounts etc.

Never ever, ever, shop again unless it’s where you’re getting a deal. Don’t buy on impulse and rather wait for the end of season sale, the annual birthday sale, the ‘retailer is obviously desperate for your money’ sale and so on. It might be a slight inconvenience to be subscribed to all the retailer’s newsletters, their Facebook pages or get their specials via SMS but the benefits far outweigh having to hit the delete button on your device. It takes a little more planning, some discipline and self-control I know. It is however really easy to be saving between 10% and 50% on literally everything you buy so don’t let the opportunity slip.

8. Buy presents now

If you’d read this article last year you’d now be ready to be buying your annual birthday and Christmas presents on the after festive season sales and putting them in the cupboard at home. Whilst everyone else was miserable and broke you’d be in the shops excited about the great gifts you could be buying, in bulk, for the year ahead. Sadly this January might then not be an option for you but think about things like the Black Friday sales in November where you can get gifts for Christmas at massively reduced prices. Also start setting aside some money each month so that next January you’re very much in the pound seats when going about our gift buying spree.

9. Weekly wealth hour

Schedule an hour a week in your diary and make it repeat for the rest of the year. While you’re at it make it repeat for the rest of your life. Use this hour to plan, research, review, schedule, search, Google, find, unpack, explore and literally everything you need to do around your savings. Couples are scheduling date nights as best practice for a healthy relationship yet you still don’t schedule time for a healthy relationship with your money. One hour a week, every week, for the rest of your life.

10. Become competitive with yourself

Wealth is a game and your most important opponent is yourself. The only way to know if you’re winning at that game is to keep score. Once you implement the above mentioned steps, and actually start tracking your savings, you’ll find you want to achieve more. Beat last month’s total, your year on year growth, the average rate of return etc. The more you play the game, and keep score of the result, the more you’ll want to play the game and influence that same scoreboard positively.

11. Tax Fee Investment

Yes I know there was supposed to only be 10 points but this one is literally for free. Before you save any money, anywhere, you get yourself a Tax Free Investment. You never get anything from SARS for free so if they’re giving you up to R33,000 per year, for free, then best you start just there. Even if you can only afford a small monthly contribution, make sure it’s going into the Tax Free Investment. It’s brilliant.

Anyone can create a culture of saving and with these practical steps I know you’ll have a much richer 2019. Take action on these first steps and next year January will be your best yet! Your future self will definitely thank you

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