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Every July the South African Saving Institute (SASI) uses the month to educate, drive awareness and promote healthy debate around saving.

In South Africa we have various ways of saving – below we discuss some of them and some of the considerations you need to take in exercising them in light of tax season that just opened on 1 July 2022 (read more about tax season here).

Bank products: choose a Tax-Free Savings Account (TFSA) that allows you to set money aside in eligible investments and watch those savings grow tax-free throughout your lifetime, you can withdraw the amount anytime with no tax consequences. Conditions are clear from each institution.

  • If you have exhausted your TFSA annual allowance, chat to your banker about other products that are available.
  • Your investments be accounted for in your tax return, based on the statement you would receive from your institution of choice.

Stock exchange: making investments in the stock exchange is considered one of the safest ways of investing and providing for the future, the stock exchange offers a variety of securities from which to choose. It is recommended to have a conversation with your accountant to assess if investing in the stock exchange is a suitable option for them and their business.

Retail savings bonds: this is an investment with the Government of South Africa which earns fixed, or inflation linked interest for the term of the investment.

  • You would receive a statement which must then accompany your tax return when filing your return.

Retirement funds:  Saving a fixed percentage of your salary instead of fixed amount so that with salary increase you keeping in line with inflation and cost of living. Retirement Annuity also comes with a tax benefit. Ensure that you follow up with your accountant to maximize on the tax benefit and consider other investment options once that has been achieved.

  • Your chosen fund will send you a statement at the end of the financial year that is to accompany your tax return when you file.

Starting a business:  Another option of deploying your savings is to start a business and provide capital for it to commence operations. It is important to discuss with your accountant how to structure what you provide as capital to your business, is it part of your initial equity, or is it a shareholder’s loan?  What legal documents need to be in place for these to be in effect? Your accountant will also assist you in ensuring that the terms of these funds is clearly documented for your financial and legal protection and considering any tax risks that may arise in future.

  • Investing in a friend/family member’s business: this is a great option, however, please make sure that all required legal and financial documents are in place so that you and your funds are protected. You may need a loan agreement or any other document that indicates your relationship to the business you are investing in.


Personal Financial Planning

As the famous Rich Dad Robert Kiyosaki says “Pay yourself first” You can do this by practicing personal financial planning as this helps you with making sure that you do end up saving consistently as you receive income.

You can use July to relook at your current year saving challenges or start saving. The best time to start was yesterday, and the next best time is today. Here are some tips:

  • Draw up a budget in line with your personal values (list of expenses and income),
  • Keep track of your budget – this requires discipline,
  • Set SMART goals for your money – Specific; Measurable; Achievable; Relevant and Time-based

Save your money for:

  • Future use
  • Indulgences
  • Children’s education
  • Retirement etc.

Use this opportunity to look at your finances like your investments, tax savings and credit card reduction.  Reach out to us here should you need any assistance.

This is a great time to start saving for your future.

Happy Saving Month!



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