Follow this easy monthly savings plan (try it out)

We all know how important it is to save for the future.

But knowing it’s important doesn’t make it easy.

Between bills, debt, and the occasional splurge, saving can feel like an unaffordable luxury.

Don’t worry—all you need is a plan.

 

Easy monthly savings plan

A monthly savings plan is a simple way to reach money-saving goals. It involves setting aside a specific amount of income every month. That’s it. For example, saving R2,000 each month can add up to R24,000 in a year. This works best if it’s automatic and connected to clear goals, like having an emergency fund or saving for a holiday.

Saving money shouldn’t feel stressful. A monthly savings plan makes it easy to follow by breaking a big savings goal into smaller monthly chunks.

Sounds doable, right? Let’s look at how it works!

 

 

How much should I save per month?

Most experts recommend aiming to save at least 20% of your income per month. For example, if you earn R20,000 monthly, save R4,000. If this feels challenging, start smaller, saving 5-10%, and increase the amount over time.

Just remember that when you save and invest, your money can grow on its own. This means the earlier you save in your life, the more your savings will grow on its own.

Tip: Starting small and increasing gradually can make savings feel less intimidating.

Here’s how you can make it as easy as possible.

 

How to save money each month

To save money each month, start by paying yourself first—automate a portion of your income to go directly into savings on the day you get your salary or wages. Create a budget to track and reduce expenses, and consider high-interest savings accounts or other investment options.

Investing in low-risk options like unit trusts or ETFs can also help you grow your savings over time.

Monthly savings plan steps:

1. Automate savings: Set up a monthly debit order or inter-account transfer to automatically save your target amount.
2. Pay yourself first: Treat savings like a priority expense. Set the automated transfer for the day you get paid. This way, you’ll save before you spend and maximize your saving success.
3. Create a budget: Track your income and expenses and make adjustments to ensure you can afford your savings amount.
4. Explore high-interest savings accounts: Open accounts, like Capitec’s notice deposit account,  with competitive interest rates to allow your savings to grow faster.
5. Invest for growth: Use low-risk investments like unit trusts, ETFs, or government bonds for even better investment returns.

 

Think about it—how much easier would saving be if you didn’t have to move money every month manually? 

Now, let’s explore what works best for South Africans specifically.

 

Best ways to save money in South Africa

The best ways to save money in South Africa include using high-interest flexible savings accounts, notice or money market accounts, and fixed-term savings accounts for secure growth. Retail savings bonds offer low-risk options with competitive rates while investing in ETFs or funds provides higher potential returns for long-term goals.

Combine these with tax-free savings accounts for retirement and emergency funds to set up a practical and sustainable savings strategy.

Best ways to save money in South Africa:

• High-Interest Flexible Savings Accounts: Use accounts that offer competitive interest rates while allowing access to funds when needed. These are ideal for short-term savings or emergency funds.
• Notice or Money Market Accounts: Choose notice accounts for higher interest rates, with withdrawal requiring prior notice (e.g., 32 days). Money market accounts also provide good returns with moderate flexibility.
• Fixed-Term Savings Accounts: Lock funds in a fixed-term account for a specific period, such as 12 to 60 months, to earn higher interest rates. These accounts suit medium-term goals where funds are not immediately needed.
• Retail Savings Bonds: Invest in South African retail savings bonds for secure, low-risk savings with attractive fixed or inflation-linked interest rates. These bonds are an excellent option for protecting savings from inflation.
• Investing in ETFs or Funds: Consider Exchange-Traded Funds (ETFs) or mutual funds for long-term savings or wealth-building goals. These options often provide higher returns than traditional savings accounts over extended periods.
• Tax-Free Savings Accounts (TFSAs): Earn interest, dividends, or capital gains without paying taxes. TFSAs are a cost-effective tool for growing savings or investments. Try to use this for retirement savings instead of small savings because the lifetime tax-free savings limits do not reset when you withdraw money.

 

Now, this next part is important.

Saving money is great. Investing is even better. Why? Because investments generate income through interest. When you invest, you get interest.

The opposite is true for debt. Debt generates extra expenses through interest costs. When you have debt, you pay interest.

The worst part…

Interest costs on debt are typically higher than interest income on investments.

In this case, it literally pays to pay off your debt.

 

Getting out of debt to save on interest

While saving money is essential, settling high-interest debt should often take priority. This is because the interest charged on debt, especially on credit cards, personal loans, or store accounts, typically far exceeds the returns you’d earn from a savings account or investment.

For example, if you’re paying 20% interest on debt but only earning 6% on savings, you’re losing money overall.

Makes sense, right? Why save at 6% when your debt costs you 20%?

 

 

How to get out of debt with debt review

For South Africans struggling with multiple debts, debt counselling, also known as debt review, offers an easy way to make debt more affordable to get out of debt for good. This process helps applicants consolidate and reduce debt payments into one more affordable monthly amount. Sometimes even reducing the interest rates.

It’s regulated by the National Credit Regulator (NCR)—which means it is legal and it is safe.

Debt review is a smart strategy because:

1. It makes monthly debt repayments more affordable: Applicants pay a single, reduced monthly instalment, making it easier to manage debt and other expenses.
2. It protects applicants from legal action by creditors: Once under review, creditors cannot take legal steps against someone for overdue accounts. As long as the person pays their debt while under debt review.

 

⭐ Related content:

• Advantages and disadvantages of debt review
• How debt review (debt counselling) works

 

Remember, it’s worth tackling your debt before you go all-in on saving. Debt review can help.

 

Final thoughts

It isn’t easy, and it won’t happen overnight. But by focusing on saving wisely and managing debt effectively, you can save and build up your financial security to create a future where financial stress takes a backseat.

To make monthly savings easier, try to:

• Settle your outstanding debts
• Automatically transfer savings on the day you get paid
• Save or invest in interest-earning accounts.

 

If you’re struggling with debt, we could help reduce how much it costs every month and free up some of your income for other critical expenses. Try our online assessment at My Debt Hero to see if you qualify.