Kickstarting Savings with a Savings Challenge — ZA ULWAZI (2024)

Finances

Written By ZA ULWAZI

Kickstarting Savings with a Savings Challenge — ZA ULWAZI (1)

Savings - the act of putting money away in a safe place to use it in the future.

Every individual should endeavor to have some form of savings and an understanding of a budget - the exact amounts of monthly financial expenses & deductions, so that you can clearly deduce income and expenses, as well as funds remaining or not at the end of the month. You can attempt to organise your finances using the 50/20/30 rule - 50% should go towards fixed expenses - necessities, 20% towards savings and investments and 30% should be reserved for any additional costs that vary such as petrol, groceries, entertainment, eating out, etc - lifestyle choices.

Why start saving:

  • It gets you in the habit of putting money aside and not spending your entire monthly salary.

  • It allows you to plan your funds for future endeavors - setting goals for your money. The goals should be SMART - Specific, Measurable, Achievable, Relevant, Time-bound.

  • Opens up possibilities and thinking from a perspective of excess and opportunities. - how can I afford it as opposed to it is too expensive.

  • Enables funds to be available for emergencies - build an emergency fund covering 3 - 6 months of your living expenses, or the reverse, 3 - 6 months of your current income. If you can save 6 - 12 months as emergency funds, the better.

  • Instills discipline with your funds, strengthening your focus and consistency towards preserving money.

There are various savings challenges available that can help you build your savings. What is important is finding the appropriate savings plan that you can be consistent with for the entire year.

One Rand Challenge = R66 795

10C Challenge = R6 679

Kickstarting Savings with a Savings Challenge — ZA ULWAZI (2)

The Ladder Challenge = R 7 800

Kickstarting Savings with a Savings Challenge — ZA ULWAZI (3)

52 Week Savings Challenge = R13 780

Kickstarting Savings with a Savings Challenge — ZA ULWAZI (4)

R350 Savings Challenge = R16 800

Kickstarting Savings with a Savings Challenge — ZA ULWAZI (5)

100 Envelope Challenge = R50 500

Kickstarting Savings with a Savings Challenge — ZA ULWAZI (6)

The Dividend Papi 52 Week Savings Challenge = R98 020

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A downloadable excel document with all savings challenges can be found here.

Avenues for placing your savings

Ideally, the choice of where your savings are placed needs to consider the following:

  1. A high interest yielding account, meeting or exceeding inflation forecast at 4% for 2021 by FocusEconomics Consensus Forecast panelists at the time of this post.

  2. An account that allows you to continuously add or stop adding funds at any time.

  3. As much as possible, limits accessibility to the funds, therefore consider accounts that have a longer notice period such as a 32-day notice account. This is highly dependent on the purpose of the savings, therefore have a goal linked to your savings.

  • Stash App

    No forms or fees app by Liberty, automatically save funds as little as R5 a day. Do your own research on the available portfolios for placing your funds, with the options of SA Top 40 Shares or into the Cash+ portfolio, or both.

  • Franc App

    This will be an investment avenue as opposed to savings, therefore you will need to do a risk assessment and personal research on the funds. You can earn 4 - 5 % on savings, and potentially earn over 10 % on investments. Franc invests money in either Cash Fund (Allan Gray Money Market) and/or Equity Fund (Satrix 40 ETF).

  • TymeBank

    Goalsave is a free savings tool from Tymebank, with growing annual interest rates the longer you save with them, starting at 4% and up to 8% if your salary is paid into your TymeBank account. You can have up to 10 active GoalSaves with a total across the accounts not exceeding R100 000.

  • South African Banks

    All banks (Standard Bank, Nedbank, FNB, Absa, Capitec Bank, African Bank, Discovery Bank, Investec) offer savings options, it is a matter of researching the kind of accounts and interest rates suitable to you. Do not be afraid to venture away from your day to day bank in search of better savings options elsewhere. Try to maximize on the free bank your change or similar offerings with your bank - where each transactional account card purchase value is rounded up to the nearest rand and the difference between your purchase amount and that amount is transferred into your Savings Account. You can choose the top-up amounts to be applied e.g. R2, R5, R10, R20, or R50. Each swipe adds that amount from your transactional account to the cents you have saved on your purchases, into your Savings Account.

    Note - you can get up to 5000 Discovery Miles (R500) when you open a Discovery Bank Account using the referral code DDQ006.

  • Stokvel

    A common and well-known form of saving, a stokvel is a savings pool where a group of individuals contributes an agreed-upon monthly amount. The group have full control of how they would like to use that money. Several banks offer stokvel accounts that can be managed as part of the stokvel group. What is essential in the success of the stokvel is:

    • Having a trustworthy group of individuals.

    • Clear goals and guiding principles.

    • Rules in the collection, storage, and dissemination of funds.

  • Money Market Funds

    Although this is more of an investment option, it is an alternative to savings accounts as they offer higher interest rates with funds accessible within a few days however could be subject to monthly minimums of e.g. R500 per month. There is a broad range of money market funds available, do your research accordingly.

  • Tax-Free Savings Account (TFSA)

    Returns are guaranteed and funds can be accessed at any time however annual savings are limited to R36 000 and a lifetime cap of R500 000. The benefits of a TFSA is interest income, capital gains, and dividends are tax-exempt, Any withdrawals from your TFSA reduce your lifetime cap i.e. if you contributed R33 000 in Year 1 and withdraw R20 000 in Year 2, your lifetime cap has now dropped to R467 000 (R500 000 - R33 000). Be sure not to treat your TFSA as a savings account for regular withdrawals but rather a long term savings account.

  • Access Bond

    An access bond is a home loan type that allows borrowers who have paid extra money into their bond to withdraw these extra funds. Placing your savings in your access bond account enables you to save at the rate of interest of the loan without paying tax on the interest saved, which is almost guaranteed to be better than the interest earned elsewhere. Note, you can only withdraw the funds you have paid over and above the monthly instalment i.e. the excess.

Other risky avenues include investing in the stock market using EasyEquities or buying Cryptocurrency using Luno or Revix - Do note with these avenues, you need to do thorough research! As much as you can make a return on your investment, you could also lose a portion of your investment.

“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.” T.T. Munger.

With all of this in mind, may you take the necessary actions in starting your year right, financially.

Savings ChallengeSavings PlanSouth AfricaMoneySavingsEmergency Fund

ZA ULWAZI

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Kickstarting Savings with a Savings Challenge — ZA ULWAZI (2024)

FAQs

How to save $5000 in 3 months? ›

How to Save $5000 in 3 Months [2024]
  1. Create a Budget and Plan.
  2. Pick up a Side Hustle.
  3. Sell Things Around Your Home.
  4. Refinance Debts.
  5. Cut Unnecessary Expenses.
  6. Reduce Living Expenses.
  7. Try an Envelope Savings Challenge.
  8. Use Cash Back Apps.
Apr 3, 2024

How to do the 52 week money saving challenge? ›

Week 1, you save $1.00. Week 2 you save $2.00, and it continues through the year, adding one more dollar to each week's savings goal. By Week 52, you'll set aside $52.00, which will bring the year's total savings to $1,378! LGFCU offers free financial planning services to help you navigate your personal finances.

How does the 100 envelope challenge work in South Africa? ›

100 envelope saving challenge for 2023, is a challenge where you save from R10,R20,R30 etc until R1000 in each envelope for the entire year. When completed all the envelopes the total amount saved up will be R50 500.

What is the 5 savings challenge? ›

The fiver challenge - save £7,000

This challenge works the same as the 52 week challenge, but you go up in multiples of £5 rather than £1. So week one = £5, week two = £10, all the way up to week 52 at £260. Alternatively, if you're not in the position to save these larger amounts, you could save £5 every week instead.

How to save $1000000 in 30 years? ›

To save a million dollars in 30 years, you'll need to deposit around $850 a month. If you make $50k a year, that's roughly 20% of your pre-tax income. If you can't afford that now then you may want to dissect your expenses to see where you can cut, but if that doesn't work then saving something is better than nothing.

How to save $5000 in 6 months with 100 envelopes? ›

The 100-envelope challenge is pretty straightforward: You take 100 envelopes, number each of them and then save the corresponding dollar amount in each envelope. For instance, you put $1 in “Envelope 1,” $2 in “Envelope 2,” and so on. By the end of 100 days, you'll have saved $5,050.

How much is 1 dollar a day for a year? ›

If you saved $1 a day for a year, do you know how much money you'd have? Roughly $30,000. This is totally 100% true.

What is the 100 envelope challenge? ›

It works like this: Gather 100 envelopes and number them from 1 to 100. Each day, fill up one envelope with the amount of cash corresponding to the number on the envelope. You can fill up the envelopes in order or pick them at random. After you've filled up all the envelopes, you'll have a total savings of $5,050.

How to save $10,000 in 6 months challenge? ›

Here's how I did it & how you can do it, too.
  1. Set goals & practice visualization. ...
  2. Have an abundance mindset. ...
  3. Stop lying to yourself & making excuses. ...
  4. Cut out the excess. ...
  5. Make automatic deposits. ...
  6. Use Mint. ...
  7. Invest in long-term happiness. ...
  8. Use extra money as extra savings, not extra spending.

What is the money stuffing challenge? ›

One of the more popular cash stuffing challenges is the 100 envelope challenge. As the name suggests, you're going to need 100 envelopes. Once you've got your envelopes, you'll number them all from one to 100. This is a daily challenge, so every day you'll pull an envelope and save the amount listed.

What is the 10K envelope challenge? ›

Stay motivated and on track to reach your $10K savings goal by tracking your progress. In this version of the challenge, each envelope has a different amount for you to choose from. As you save, color in 1 envelope a day for 100 days or 2 per week for 50 weeks. This instant download comes with a bonus cash envelope.

Is the 100-envelope challenge worth it? ›

The benefit of the 100 Envelopes Challenge is that it starts small and encourages constant, conscious saving that builds quickly. But the trend—and the internet's obsession with buying “aesthetic” envelopes for it—may not be the most effective way to put away money, according to financial experts.

What is the 365 penny challenge? ›

The premise of the Penny Challenge is simple: You start by saving one penny on day one, two pennies on day two, three pennies on day three, and so on. Each day, you increase the number of pennies you save by one until day 365, where you will save $3.65. By the end of the year, you'll have saved a total of $667.95!

What is the 50 15 5 easy trick for saving and spending? ›

50 - Consider allocating no more than 50 percent of take-home pay to essential expenses. 15 - Try to save 15 percent of pretax income (including employer contributions) for retirement. 5 - Save for the unexpected by keeping 5 percent of take-home pay in short-term savings for unplanned expenses.

What is the 3 saving rule? ›

This model suggests allocating 50% of your income to essential expenses, 15% to retirement savings and 5% to an emergency fund. This plan allows you to meet your immediate needs and plan for the future before you spend on anything else.

What is the quickest way to save $5000? ›

Ways To Save $5,000 in a Year
  1. “Chunk” Your Savings. The first step to saving $5,000 in a year is to break down your savings goal into manageable portions. ...
  2. Automate Your Savings. ...
  3. Save in a High-Yield Saving Account. ...
  4. Track Your Cash Flow. ...
  5. Boost Your Earnings. ...
  6. Declutter for Cash. ...
  7. Evaluate Your Subscriptions. ...
  8. Challenge Yourself.
Feb 5, 2024

How to save $5000 in 3 months with 100 envelopes? ›

The 100-envelope challenge is a way to gamify saving money. Each day for 100 days, you'll set aside a predetermined dollar amount in different envelopes. After just over 3 months, you could have more than $5,000 saved.

How quickly can I save 5000? ›

How long will it take to save?
Savings GoalIf You Saved $200/monthIf You Saved $400/month
$5,00025 months13 months
$10,00050 months25 months
$20,000100 months50 months
$30,000150 months75 months
7 more rows

How much to save $10,000 in 3 months? ›

Setting realistic savings goals is essential to ensure that you don't set yourself up for failure. One way to do this is by breaking down your target amount into smaller milestones. For example, if you aim to save $10,000 in three months, you can divide it into monthly targets of $3,333.

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