The ultimate guide to saving money

Saving money is key to your financial security – but let’s be honest, it’s easier said than done.

While saving doesn’t mean giving up the life you love entirely, it does mean setting enough funds aside to settle debt, save for a dream holiday, or create a safety net for the future.

Here, we share some practical, easy-to-implement savings strategies. From daily cost-cutting to bigger financial moves, these methods will help you build your nest egg and ultimately reach your financial goals.

Understand the role of inflation in saving 

Your money loses value over time due to inflation, which is the rising cost of goods and services.

As the cost of living increases, the value of your money decreases. Therefore, simply keeping your cash in a transactional bank account (or stashing it under the mattress!) isn’t enough. Your money needs to grow to keep pace with inflation.

Managing inflation is the key to long-term saving, so it pays to take a proactive approach.

A reputable financial adviser can help you make good financial decisions to ensure your savings and investments maintain their value or, ideally, grow over time.

Steps towards saving 

Saving strategies help you manage money wisely, achieve financial goals, and prepare for the unexpected. The following steps should assist you as you set out to save more.

Draw up a budget

A budget is your roadmap to financial success. Without it, saving money can feel like navigating without a compass. Some popular strategies are shown in the "Budgeting techniques" section, further below.

Track your expenses

The first step to saving more is tracking your expenses, an essential aspect of effective money management. Knowing where your money goes helps you cut unnecessary spending. By analysing your spending habits, you can set financial priorities, find cost-cutting opportunities, and boost your savings potential.

Whether you’re saving for a specific goal, or simply trying to improve your financial situation, you can’t make progress if you don’t track your spending.

Set realistic financial goals

Saving money is about more than just building wealth – it’s about managing your money more effectively. This includes saving in a way that allows you to achieve your goals, have enough for unexpected expenses, and secure peace of mind.

Identify your needs and priorities, and then set clear, realistic financial goals. “Save R5,000 monthly for a deposit on a home by December 2026” is a measurable saving goal, but “save more money” isn’t.

Measurable goals will allow you to track your progress, stay motivated, resist buying on impulse, and make better spending decisions.  

Smart saving strategies

Savvy saving isn’t just about putting money aside – it’s about making the most of your financial potential.

This means thinking strategically, budgeting effectively, and making informed choices when allocating resources.

Once you’ve learnt how to save money, cutting unnecessary expenses, putting spare cash into savings, and taking steps to grow your wealth, will become second nature.

Some smart saving strategies include:

• Paying off debt as soon as possible
• Adopting a budgeting technique that works for you 
• Automating your savings
• Building an emergency fund 
• Putting money into a high-interest savings account 
• Investing for the future 

Budgeting techniques 

The following budgeting techniques are useful and popular. Select the one that works best for your needs and circumstances, or click here to read about additional techniques.

The envelope system. Set a budget for categories such as groceries, transport, and education. Withdraw cash and place the set amounts in each labelled envelope. Spend only what’s inside each envelope to stay within your budget.  

Zero-based budgeting. Every rand you earn has a job. With this method, you assign all your income to expenses, savings, or debt, until your balance equals zero. This ensures every cent is accounted for.

The 50/30/20 rule. Divide your income into three parts – 50% for needs (rent, groceries, insurance, debt repayments), 30% for wants (entertainment, hobbies), and 20% for savings (emergency fund, retirement, or paying off loans faster). The latter can also be used for extra debt repayments.

Building an emergency fund

Unforeseen expenses can derail your financial plans. For this reason, it’s crucial to have an emergency fund that covers three to six months’ worth of expenses.

An emergency savings fund will function as a safety net should you, for example, have a medical emergency, need essential home repairs done, or lose your job.

It will also help you cover unexpected expenses without needing to take out a high-interest loan or go into debt – which in turn reduces anxiety and stress under already stressful circumstances.

Growing your savings 

Once you have accumulated extra savings, you can move them into vehicles that maximise growth.

High-interest savings accounts

High-interest savings accounts help your money grow faster than traditional savings accounts. They offer significantly higher interest rates while still ensuring your funds are easily accessible.

By choosing a high-interest savings account, you can:

• Earn more on your savings through preferential interest rates
• Protect your money against inflation
• Access your funds whenever you need them

Government bonds and fixed deposits

Government bonds and fixed deposits are secure investment options that provide steady returns on your money.

These investments are considered low risk and dependable, offering a predictable income while protecting your capital.

Government bonds are fixed-income investments issued by governments to raise money. They provide regular interest payments and you get your full investment back at maturity. They are a lower-risk investment than equities (stocks and shares).

A fixed deposit account offers a guaranteed interest rate, and you can choose your investment period. It generally delivers a reliable return, without market risk.

The above investments help protect your savings from market swings and create a stable foundation for your financial future.

Investing in the stock market

Investing in the stock market can help grow your wealth over time.

While the stock market carries risks, it historically performs better than other investments and helps protect your money against the effects of inflation. Having funds in the stock market is, therefore, an essential part of your investment strategy.

The benefits of stock market investing include:

• Higher potential returns than those provided by savings accounts
• Growth through compound interest (interest earned on top of the interest earned on your initial investment)
• Protection against rising prices
• Support for major life milestones, such as retirement 

The stock market beats inflation, boosts your purchasing power, and helps you reach goals such as paying for your children’s education, buying a home, or retiring comfortably.

However, stock market investing requires knowledge of the markets, investment strategies, and risk management. It is a highly complex field that takes many years to understand.

It’s best to work with an accredited financial adviser, who can manage your portfolio according to your needs and circumstances.

Managing debt wisely

Good debt management is crucial to healthy finances, but different types of debt – for example, student loans, home loans, and credit card balances – require different strategies.

Good debt management helps you to:

• Reduce your interest payments 
• Improve your credit score
• Reduce financial stress
• Build long-term wealth

The path to financial stability often begins with effective debt management. Taking control of your debt is the first step towards changing your financial destiny.

Types of debt

Debt comes in many forms. Student loans, credit card debt, bonds, car loans, and personal loans all come with different terms and interest rates.

Knowing these differences is key to managing your finances and boosting your savings.

High-interest debt, such as credit card debt, can drain your savings, so paying it off quickly should be a priority. On the other hand, low-interest debt, such as a home loan, may offer tax benefits and help build long-term wealth through asset ownership (the home or property).

Understanding your debt and its impact allows you to make smarter financial decisions, manage payments effectively, and create more room for savings and financial stability.

Debt repayment strategies

Debt repayment strategies can help you take control of your financial situation and get you on the path to a debt-free future, by helping you manage and pay off your debt.

The following are some useful methods for achieving this.

Debt consolidation

Debt consolidation allows you to combine multiple debts into a single monthly repayment, at a reduced interest rate. This reduces the overall cost of your debt.

To consolidate your debt in this way, it’s best to consult a debt expert.

DebtBusters’ debt experts can help you restructure your debt in a way that frees up cash, prevents creditors from taking legal action against you, and helps you regain financial stability.

Once you are debt-free, it’s crucial to have a solid plan in place to avoid over-accumulating debt in the future.

Budgeting and expense reduction

Create a detailed budget, identifying areas where you can cut expenses and free up money to allocate to debt repayment. This will help you pay off your debt faster.

Boosting your income

Explore opportunities to increase your income, such as taking on a part-time job or freelance work. This can help accelerate your debt repayment efforts.

Reducing your daily expenses

Reducing your expenses is a vital step towards saving money and achieving financial stability.

By examining your daily spending habits and making conscious choices, you can free up funds to use towards your savings goals. This includes cutting back on non-essential items, choosing more cost-effective options, and eliminating wasteful spending.

Following the above steps may not always be easy, but they will ultimately help you reach financial security and build a brighter future. Take the first step today.

Need help saving?

Can’t save because you’re struggling to pay off debt? DebtBusters can help. Contact us today for expert advice and personalised support.

At DebtBusters, we will find the best debt solution for you and walk you through the process, one step at a time.