Savings and investments: A guide to growing your money

Growing your money depends on what you want to achieve, how you want to achieve it and what you’re comfortable with. With a little planning, a mindset shift and consistent action, you can take control of your money and begin growing it steadily over time.

Here are 6 smart ways to help you grow your money and achieve the tomorrow you’re looking for.

• Start small, start now

The earlier you begin saving, the more time your money has to grow. It will take time for your money to reach its full potential, but thanks to the power of compound interest, the interest you earn starts to earn interest of its own.

Even if you’re only able to put away a small amount each month, it adds up over time. The key is consistency. Think of it like planting a tree: it may not look like much at first, but given time and regular care, it grows into something substantial.

Try this:  

• Set a monthly goal that’s manageable for your budget  
• Automate your savings so that the money leaves your account as soon as you get paid and, over time, this becomes a routine

• Save with a purpose and to invest

Not all savings are created equal. Setting specific goals such as building an emergency fund, buying property or preparing for retirement gives your savings direction and makes it easier to stay motivated.

Once you’ve built up some savings, you can put your money to work through long-term investments. For example, you might save up to R10 000 and then invest it in a unit trust or a fixed-term deposit that offers higher returns than a regular savings account. This is how you move from saving to building wealth.

Something else that can help is creating mini goals along the way, such as saving R5 000 for 6 months and then deciding to invest it into accounts designed for higher balances.

• Stay on top of your tax

A common oversight when planning finances is forgetting about tax. Keep in mind that interest or income earned from your investments could be subject to taxes. This reduces your returns and leaves you with less money to reinvest and grow.

However, there are options for decreasing the impact of tax on your investible income. For instance, using tax-free savings products, such as a tax-free savings account (TFSA) lets your money grow without being taxed on the interest or capital gains*.

Discover how a TFSA works and why it’s an effective way to save for the future.

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Retirement products may also offer tax advantages such as tax-deductible contributions. This means that the money you contribute to a registered retirement annuity (RA) could lower your taxable income, helping you save for the future while paying less tax today. Plus, the investment growth in your RA is tax-free until retirement, giving your money more room to grow.

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• Watch out for hidden fees

It can be easy to overlook fees when signing up for a savings or investment product, but those small charges can eat into your returns over time.

Before signing up for any product, check what fees are charged, such as monthly account fees, withdrawal penalties or performance fees. Where possible, opt for products with low or no management fees, especially if you’re maintaining a minimum balance.

Look out for certain accounts where if you keep a balance of R10 000 or more, you could pay no monthly management fees.

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• Get expert guidance

The world of investing can involve a lot of unknowns, but you don’t have to take on the journey alone. With a qualified financial advisor, you can create the best strategy for your goals and keep on track to achieve them.

Using goal-based financial planning, an advisor works with you to help make the most of your money, avoid common pitfalls and get you closer to your goals.

• Choose the right tools

Once you’ve defined your savings goals and how much you want to set aside, the next step is choosing the right investment products to help you get there.

Choose investment products that match your timeline, budget and risk appetite.

If you’re saving for something long-term such as a house or a business, a product with higher growth potential might be right even if it carries a little more risk. If you want to keep your money accessible, a flexible savings account might suit you better.

Quick tip: Use our product filter tool to match your needs, such access to funds, risk level, fees and interest rate, with the right savings or investment product.

Try out our product filter

Start your journey

Financial growth doesn’t happen overnight, but with patience, knowledge and a few smart decisions, you can create the kind of future you’ve always imagined.

Speak to one of our experienced financial planners and get a tailored plan that turns your goals into action.

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_{Disclaimer: This article is solely intended for information. It does not constitute financial, tax or investment advice or recommendation. Please speak to a financial advisor or registered financial professional before making any financial decision(s).}

_{Standard Bank, its subsidiaries or holding company, or any subsidiary of the holding company and all of its subsidiaries make no warranties or representations (implied or otherwise) as to the accuracy, completeness or fitness for purpose of the information provided in this article or that it is free from errors or omissions.}