Saving money isn’t just about putting cash aside—it’s about giving your future self the gift of freedom and options. Whether it’s for fun things, emergencies or long-term goals, learning to save now can make all the difference.
Why save?
Saving is setting money aside for things you need or want in the future. It could be exciting stuff like a gaming console or practical things like fixing your car or buying a house one day.
The trick is to save ahead instead of going into debt and playing catch-up. With savings, you can pay for things outright rather than borrowing money and paying extra in interest. When you buy something on credit, you end up paying much more for it, because the bank charges you interest for lending you the money.
Let’s look at an example of Sisonke and Kabelo who earn the same salary but have different saving habits.
Nolwazi explains…
Savings vs debt: Sisonke vs Kabelo
Let’s look at Sisonke and Kabel behaviour:
Sisonke saves R150 every month in his emergency fund. After a year, he has about R1 900, thanks to his savings and a little interest. When his washing machine breaks, he doesn’t stress as he is financially prepared for an emergency. He just buys a new one for R1 500 cash and has R400 of savings left.
Kabelo spends everything he earns. When his washing machine breaks, he has to buy a new one on credit for R1 500. But with a 15% interest rate over 12 months, Kabelo ends up paying R1 625 in total.
At the end of the second year:
Sisonke has saved another R1 900 and now has R2 300 in his emergency savings account.
Kabelo has no savings and had less spending money each month due to the extra monthly fridge payment.
The lesson? Saving keeps you ahead, while debt holds you back.
TYPES OF SAVINGS
In a perfect world, everybody should have savings for the short, medium and long term, but even just start, no matter how small.
Short-Term Savings
Emergency Fund:
Life happens—your car might break down, or you might need to replace a television. Save enough to cover unexpected expenses without using credit.
Fun Fund (Wants):
Want new sneakers or a bicycle? Save up instead of using credit. Patience pays off—you won’t spend extra on interest.
Long-Term Savings
Grown-Up Goals:
Start saving now for big things like a car, further studies, or a house. It might take years, but every little bit gets you closer.
Retirement Fund:
Many South Africans don’t save for retirement, meaning they rely on family or the government later in life. If you start saving small amounts early, compound interest will help your money grow, giving you independence and security.
Do your future self a favour
The hardest part about saving is that while your friends might now have the latest smartphone or braid styles, you have to make do with something cheaper or second-hand. But remind yourself that you are doing it for the future you.
Start small, stay consistent, and watch your savings grow.
Further reading
Savings 101
Set clear savings goals
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