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:

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

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52 Week Savings Challenge = R13 780

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100 Envelope Challenge = R50 500

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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 save $5 000 with the 52 week money challenge? ›

Here are a few more ways to save $5,000 by the end of 2023:
  1. Save $96.16 every week.
  2. Save $192.31 every two weeks.
  3. Save $416.67 every month.
  4. Save $1,250 every quarter.
  5. Save $2,500 every six months.
Jan 5, 2023

What is the 21 day challenge for saving money? ›

That is what this challenge is all about: taking 21 days to make some drastic, but realistic, changes in order to save at least $500 each month. If you are anything like I was, you probably have more bills and payments due each month than you have money coming in.

How does the 52 week money saving challenge work? ›

There are no complicated rules to remember. 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!

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.

What is the $10000 in 100 envelope challenge? ›

On each envelope, write the day number and the amount you need to save for that day. For instance, on the first envelope, you would write "Day 1: $1" and on the second envelope "Day 2: $2", and so on all the way to Day 100: $100. Each day, you take the envelope for that day and put the designated amount of cash inside.

What is the 100 envelope challenge? ›

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.

How much is $1 a week for a year? ›

All you do is start with $1 in Week One. Then every week after that you add $1 to the amount you're saving for the week. That's it! If you do this, you'll have a cool $1,378 extra in one year's time!

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 penny saving challenge? ›

What is the 1p challenge? The well-known 1p challenge is a money saving method that lasts 365 days. It works by increasing the amount you save by 1p each day of the year. On the first day of the challenge, you start by saving one penny.

What is the 30-day cash challenge? ›

One way to make saving money easier is to try the 30-day savings challenge. Here's how it works: When you have the urge to make an impulse purchase, wait for 30 days and give yourself time to think about it. While considering the purchase, deposit the money you need for it into a savings account.

How can I save $1 dollar a week for 52 weeks? ›

Match each week's savings amount with the number of the week in your challenge. In other words, you'll save $1 the first week, $2 the second week, $3 the third week, and so on until you put away $52 in week 52.

What is the envelope saving method 52 weeks? ›

The most common way to complete the challenge is to start by saving just $1 in week one and increasing what you save by $1 each week, saving $2 in week two and $3 in week three, all the way up to $52 in week 52.

How much do you save in the 52 envelope challenge? ›

What is the 52 week money challenge? The 52 week money challenge is designed to help you save significant money over a year. It involves saving a small amount, usually £1 per week, and increasing the amount by £1 each week. By the end of the challenge, you'll have saved a total of £1,378.

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 fast can you save $5,000 dollars? ›

Break It Down Into Months. The first step to reaching any financial goal is to break it into bite-sized pieces. If you want to save $5,000 in one year, you'll need to save approximately $417 a month. That's about $97 a week.

How to save $5000 in 3 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 long will it take to save up $5,000? ›

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

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