Savings

[DrewChan]

Whats percentage of your salary do you put away per month for a rainy day?
Additionally is there a "minimum" you believe should be saved per month?

 

[AlmightyBender]

The simple answer is save and invest as much as you can!

For rainy day fund the general rule/goal is that it is very nice to have at least three times your salary on hand. This allows you to cover emergency purchases (e.g. broken fridge, calling out plumber etc) and also in the event of you losing job or suddenly not being able to work you can survive for three months on your savings, which is generally enough time vir n boer om n plan te maak.

For long term retirement traditionally 10% of gross salary is the minimum to save if you are young and have lots of time. 15%-20% is ideal in the modern age though.

The last part of the equation is the medium term for which it is a good idea to start accumulating the traditional asset classes such as equity, bonds, property etc

 

[hellfire]

Whats percentage of your salary do you put away per month for a rainy day?
Additionally is there a "minimum" you believe should be saved per month?

I try to put away at least 10% a month of my net

 

[Cicero]

Just less than 10% of gross if its a good month, although sometimes(often) it not that easy.

 

[Ecco]

Put away as much as possible is probably the simplest way to think about it.

There is also a school of though amongst Financial advisors etc that you should ideally have at a minimum 3 months worth of your salary tucked away (and liquid) for emergencies.

 

[Cicero]

Put away as much as possible is probably the simplest way to think about it.

There is also a school of though amongst Financial advisors etc that you should ideally have at a minimum 3 months worth of your salary tucked away (and liquid) for emergencies.

In an ideal world...wow

 

[TehStranger]

I'm in the fortunate position where I have plenty of disposable income at the end of every month, so presently 65% of my net is going towards various savings. 10% goes towards long term saving, 15% goes towards topping up my "emergency fund" (just over 3 months salary and counting) and the remain 40% is going towards buying a house (hopefully within the next year and a half).

 

[supersunbird]

15% of gross goes to work pension scheme. Another 15% goes into discretionary investments (10% ETFs/UTs, 5% RA), 2.5% into a cash bank account.

 

[Cius]

15.6% into long term pension savings that I will not touch till retirement. Company said it was 15% of my salary but when I checked it was in actual fact only about 12%. Seems the 15% is on "Pensionable earnings". Stupid concept. Make sure you put at least 15% away. I have additional products that I save into in addition to my company pension scheme.

Other than that I save a lot of money into various budget categories. For instance I have a car expenses category where I may put a few hundred rand every month so that in the event of me needing to change tires, pay license fees, pay fines, pay excess on insurance etc I have cash on hand. I have similar savings categories for medical expenses, cars, household items, clothing, school fees, electricity (save in summer for higher winter consumption) etc. I don't get people who can't budget like that and if they need to replace car tires and fix the car in the same month they are screwed. By slowly building up a reserve I have thousands set aside for all major expense groups so that no matter how bad the month is I really could care less as I prepared for those expenses well in advance and have that cash available to me in my open access bond. The money helps doubly then as not only is it my buffer its also saving me tons of interest on my bond while still being instantly accessible. These budget categories account for about 10% of my salary with the rest being for deductions or expenses that happen every month.

 

[AlmightyBender]

15.6% into long term pension savings that I will not touch till retirement. Company said it was 15% of my salary but when I checked it was in actual fact only about 12%. Seems the 15% is on "Pensionable earnings". Stupid concept. Make sure you put at least 15% away. I have additional products that I save into in addition to my company pension scheme.

Other than that I save a lot of money into various budget categories. For instance I have a car expenses category where I may put a few hundred rand every month so that in the event of me needing to change tires, pay license fees, pay fines, pay excess on insurance etc I have cash on hand. I have similar savings categories for medical expenses, cars, household items, clothing, school fees, electricity (save in summer for higher winter consumption) etc. I don't get people who can't budget like that and if they need to replace car tires and fix the car in the same month they are screwed. By slowly building up a reserve I have thousands set aside for all major expense groups so that no matter how bad the month is I really could care less as I prepared for those expenses well in advance and have that cash available to me in my open access bond. The money helps doubly then as not only is it my buffer its also saving me tons of interest on my bond while still being instantly accessible. These budget categories account for about 10% of my salary with the rest being for deductions or expenses that happen every month.

I think that is a great concept, thanks for the budgeting tip!

 

[guest2013-1]

I'm currently pumping every cent I have into debt. I know it's not a good idea, but the faster I pay this off the better / more I can save without having to worry about bull**** like interest. Again, I know it's not a good idea. (I do have retirement fund but it's not savings as in now)

 

[Icarium]

I'm currently pumping every cent I have into debt. I know it's not a good idea, but the faster I pay this off the better / more I can save without having to worry about bull**** like interest. Again, I know it's not a good idea. (I do have retirement fund but it's not savings as in now)

Getting into debt is a bad idea, paying it off is definitely good. Unless there's somewhere you can get a better rate than you're paying (Unlikely if it's unsecured debt).

 

[bromster]

I feel comfy knowing that I have a month or two's salary in a second account in case life goes pear-shaped, but I have a pretty secure job and I have medical aid, so if I didn't have this money, I wouldn't be too worried.

That being said, If you are paying off a car or home loan, I wouldn't save a cent. I would put every spare bit of cash into paying off my "principal debt". You will struggle to find an investment at the moment which would make you more money than paying off your loan early. Especially with the current low interest rates.

One of the best things I did was to set up my Credit Card's debit order to take the full amount due every month. This is not negotiable, and forces me to think for a few seconds before I swipe.

 

[guest2013-1]

15.6% into long term pension savings that I will not touch till retirement. Company said it was 15% of my salary but when I checked it was in actual fact only about 12%. Seems the 15% is on "Pensionable earnings". Stupid concept. Make sure you put at least 15% away. I have additional products that I save into in addition to my company pension scheme.

Other than that I save a lot of money into various budget categories. For instance I have a car expenses category where I may put a few hundred rand every month so that in the event of me needing to change tires, pay license fees, pay fines, pay excess on insurance etc I have cash on hand. I have similar savings categories for medical expenses, cars, household items, clothing, school fees, electricity (save in summer for higher winter consumption) etc. I don't get people who can't budget like that and if they need to replace car tires and fix the car in the same month they are screwed. By slowly building up a reserve I have thousands set aside for all major expense groups so that no matter how bad the month is I really could care less as I prepared for those expenses well in advance and have that cash available to me in my open access bond. The money helps doubly then as not only is it my buffer its also saving me tons of interest on my bond while still being instantly accessible. These budget categories account for about 10% of my salary with the rest being for deductions or expenses that happen every month.

How do you keep track of it?

 

[F1 Fan]

The simple answer is save and invest as much as you can!

you can survive for three months on your savings

That. And I save around 30% of my salary every month. Since I am a contractor, I have to plan for rainy days to come. That extra money goes straight into my bond account.

 

[guest2013-1]

Getting into debt is a bad idea, paying it off is definitely good. Unless there's somewhere you can get a better rate than you're paying (Unlikely if it's unsecured debt).

Yea I know but I had to (I was debt free last year, but moved to JHB to get a job and what not and had to subsequently dish out since I don't have **** like furniture, not since I came back from Dubai)

It's only about 100k, I push as much into it as I can, figure I can be out of it in 12 months so it's not too bad. The more I push into it the less the interest is in a month the more I push into it. I estimate 12 months but it could be sooner

 

[guest2013-1]

I feel comfy knowing that I have a month or two's salary in a second account in case life goes pear-shaped, but I have a pretty secure job and I have medical aid, so if I didn't have this money, I wouldn't be too worried.

That being said, If you are paying off a car or home loan, I wouldn't save a cent. I would put every spare bit of cash into paying off my "principal debt". You will struggle to find an investment at the moment which would make you more money than paying off your loan early. Especially with the current low interest rates.

One of the best things I did was to set up my Credit Card's debit order to take the full amount due every month. This is not negotiable, and forces me to think for a few seconds before I swipe.

One tip I have for you in such a case is to rather get a cheque card and ditch the credit card (that's what I did) and then the thinking is much the same, but less hassle.

 

[AlmightyBender]

Yea I know but I had to (I was debt free last year, but moved to JHB to get a job and what not and had to subsequently dish out since I don't have **** like furniture, not since I came back from Dubai)

It's only about 100k, I push as much into it as I can, figure I can be out of it in 12 months so it's not too bad. The more I push into it the less the interest is in a month the more I push into it. I estimate 12 months but it could be sooner

Nothing wrong with that at all, especially because of the short term that you can kill the debt in. A riskier situation would be if you were only pumping everything you have into a 10 year debt without leaving any extra for emergency purposes. It is the medium to long term unforseen events/changes that get really nasty.

 

[Cius]

@AcidRazor: I track it with Microsoft Money. Thinking of converting to Nedbank's my financial life app though as then its automatic and I don't have to capture as many slips.

 

[guest2013-1]

Nothing wrong with that at all, especially because of the short term that you can kill the debt in. A riskier situation would be if you were only pumping everything you have into a 10 year debt without leaving any extra for emergency purposes. It is the medium to long term unforseen events/changes that get really nasty.

Yea I'm covered for everything, so if the car craps itself it's already covered (long term rental, not my problem, made sure of it)

Have medical aid so I'm fine there if something happens and stuff. Just debt now. If I can pay that crap off I can push in more than 50% of my salary straight into savings