Your guide to financial security this World Savings Day on October 31

Every year on October 31, the world marks World Savings Day – a day dedicated to the power of saving money for a better future. This year’s theme, ‘This is not a savings account’, challenges us to rethink what saving truly means. It’s not just about stashing cash in a bank; it’s about building resilience and security for ourselves and our families. 

This message is especially urgent for South Africans, where many households have little to no emergency savings. With small habit changes, we can turn today’s small savings into tomorrow’s stability and opportunity.

 Saving: The Foundation of Financial Health

The first step toward financial well-being is disciplined saving. Think of saving as the bedrock of your financial house – everything else rests on it. Even a modest amount set aside regularly creates a safety net for life’s surprises. An emergency fund of a few months’ expenses can prevent a setback from becoming a crisis. In tough times, saving isn’t a luxury – it’s essential, and true financial success comes not from one big move but from steady, small steps. By paying yourself first (setting aside money as soon as you earn it), you prioritise your future. Over time, these habits become the cornerstone of your financial health, giving you peace of mind. 

From Saving to Investing: Growing Your Wealth

While saving is crucial, keeping money in a low-interest account isn’t enough to truly conquer your tomorrow. Inflation can quietly erode the value of stagnant savings. That’s where investing comes in. Saving and investing are two sides of the same coin – one builds your safety net, the other helps it grow. Investing means putting your money to work to generate returns through compound growth. To begin, you don’t need to be rich or an expert – modern tools make investing accessible to all. Options like tax-free savings accounts or low-cost index funds allow even small budgets to start investing. 

The key is consistency, not timing the market. Thanks to compounding, even a small amount invested each month can become substantial over time. By combining disciplined saving with prudent investing, you ensure your money stays safe and grows, helping you reach long-term goals. 

Three Actions to Start Saving Today

Getting started can feel overwhelming, but small changes make a big difference. Here are three proven actions to kick-start your saving habit:

1. Track Your Spending and Budget: You can’t save what you don’t track. Record your monthly expenses – use a budgeting app or a notebook. This shows where you can cut back. Freeing up even a little money gives you something to save. Create a simple budget that treats savings as a must-pay bill each month.
2. Pay Yourself First (Automatically): Automate a transfer of a fixed amount into a separate savings account right after payday. Even if it’s R500 a month, stick to it and raise it when you can. Automation builds the habit by removing temptation. Consistency matters more than the amount – you’re steadily building your “saving muscle.”
3. Build an Emergency Fund and Tackle Debt: Aim to save 3-6 months of expenses as an emergency cushion. This buffer helps you handle shocks without new debt. At the same time, address any high-interest debt like credit cards – those charges quietly eat away at your progress. Paying off debt frees up money to save and invest. 

Two Beginner-Friendly Investing Actions

Once you have some savings and a handle on your budget, it’s time to make your money work for you. Here are two easy ways to dip your toes into investing:

1. Start Small with Simple Investments: Open a tax-free savings account (TFSA) or buy into a low-cost index fund (ETF). These let you invest in a broad, diversified portfolio with just a few hundred rand. Set up a small monthly contribution and let it grow through compounding. The goal isn’t to get rich quickly but to build wealth steadily while keeping risk low.
2. Learn and Practice for Free: Attend free financial literacy webinars or workshops and read educational articles to grasp investing basics. Try a demo trading account to practice with virtual money in real market conditions. This way, you learn with zero risk. The more you understand, the more confident you’ll be when investing real money. 

By building good saving habits and gradually learning to invest, you’re saying “yes” to your future self. So, this World Savings Day, take one action: open a savings account or attend a free finance workshop, and commit to it. You can transform “maybe later” into “today”, and conquer your tomorrow, one rand at a time. 

* Israfil, CEO of CFI Financial Group South Africa.

PERSONAL FINANCE