How disciplined saving can secure your financial future

Unlike financial freedom – which means never having to stress about money again – financial independence is more about having your own safety net or personal buffer to fall back on during those tough times. It’s a more realistic and attainable goal. Yet the reality is that 45% of South Africans would struggle to cover a R5,000 emergency without borrowing from somewhere or someone, according to the South African Reserve Bank.

And it's not just about handling the immediate financial stresses, but also the future stresses. Whether it’s unexpected medical bills or retirement, your ability to gain financial independence depends on the reserves you start building today.

Start with the basics, as early as possible

There is a massive difference between starting to save at 25 versus 35. Even if nothing else changes, how aggressively you save or how your investments perform, starting 10 years earlier can double your retirement savings, thanks to the power of compound interest.

Compounding allows the money you earn to start generating returns of its own. The sooner you start, the more time your savings have to grow, which means easing the financial pressure later in life. Delaying saving until you’re older often means you’ll need to put away much more to reach the same goals, and by then, you may not have the resources or energy to do so.

This is the hard reality that many South Africans face. The question to ask is whether it’s easier to reduce spending now when you're young or when you're old and more vulnerable? Unfortunately, one can't have it both ways. You can't spend money indiscriminately in your younger years and still expect to live well when you're older.

Be consistent, no matter how small

Another key question people ask is how much they need to save. My advice is to start small but be consistent. Sporadic saving, whether it’s once a year when you receive a bonus or only when you remember- doesn’t build the discipline or financial habits you need to gain financial independence.

Think of it like a diet. Crash diets might work temporarily, but sustainable lifestyle changes are more effective in the long term. The same applies to saving. Building it into your monthly routine, through something as simple as a debit order, turns saving into a habit rather than an afterthought.

From a behavioural finance perspective, a 2022 study by the University of Cape Town found that automated savings, such as scheduled debit orders, significantly improve the probability of success. Making regular contributions also helps to reduce the impact of investment volatility, a strategy known as rand-cost averaging. This means that over time, this approach lowers the risk of investing only when markets are high.

Control equals empowerment

Many people feel overwhelmed by their financial situation, but taking control, even in a small way,  is an empowering step. When you start saving, you shift your mindset from surviving to planning. That shift opens doors. Suddenly, it’s not just about making it through the month. It’s about funding education, starting a side business, or breaking the cycle of debt.

And speaking of debt, it’s the exact opposite of saving. Where savings generate compound interest for you, debt creates compound interest against you. The longer you carry it, the more expensive it becomes. Prioritising savings means moving from paying the bank to paying yourself first.

We live in a world filled with temptation. It’s easy to justify a new car or a spontaneous holiday. But every spending decision has an opportunity cost. That R500,000 spent on a car today could be worth R1 million in seven years or even R20 million in 40 years if invested wisely. It’s a simple question: what will bring you more fulfilment, a short-term indulgence, or long-term security?

Establishing a goal, whether it’s buying a home, funding your children’s education, or retiring comfortably, helps anchor your savings behaviour. When you’re clear on what you’re working towards, it becomes easier to say no to unnecessary expenses.

Set up a system that works for you

The good news is that our financial services industry makes disciplined saving easy. Setting up a debit order aligned to your affordability is a powerful first step. You don’t have to start big – you just have to start. Then stick to it.

Picture yourself 20 years from now. Will you be grateful that you tightened your belt and made those small sacrifices when you did, or regret not doing so when you had the chance? The answer usually speaks for itself. And the sooner you start, the less effort it takes. That’s the real power of saving and financial empowerment.

* Pask is the chief investment officer at PSG Wealth.

PERSONAL FINANCE