At the beginning of the year, I started a savings challenge, where I increased my monthly contributions in increments of R200, i.e. R200, R400, R600, etc. As you can imagine, it started fairly easy and got harder and harder as the year went on.
In September, my savings contribution was R1,800. This is over and above what I had already been saving every month for the past year. Something quite cool started to happen when saving became harder and harder. To make room for the savings challenge, I started to cut my expenses by R200 every month. This had the walking into a pool from the shallow end effect: I eased myself into a higher and higher savings rate.
My goal ever since I started investing was to max out my TFSA. When I added September’s R1,800 together with September’s TFSA contribution, it was more than the R2,750 average to max out the TFSA allowance. This means I managed to reduce my lifestyle expenses to help realise my goal for the year 2020/21 financial year.
Last year I wrote this blog about saving and investing. One of the key things is starting small. This strategy worked well to increase my savings rate and for a few of my friends who were saving for the first time. Some of them were incrementing their monthly savings with R100 and some with R50, however, this only emphasises the point that starting is far more important than the amount itself.
Njabulo Nsibande is a Just One Lap user-turned-contributor and a founding member of an investment club. His “Cash Club” blog details his experiences balancing the financial obligations of a young parent with his investment aspirations.
Follow Njabulo’s journey here every month. You can also follow his trading journey by listening to his Village Trader podcast.
Find him on Twitter: @njabulo_goje.
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