The Ugly Truth About Saving

“Opportunity is missed by most people because it is dressed in overalls and looks like work.”

~ Thomas Edison

Here’s a little nugget that might just raise an eyebrow: Did you know that a whopping 35% of middle-class South Africans aren’t squirreling away a single cent, while a further 61% save a mere 10% or less of their income?

In a country where 11.9% of those living between the upper and lower bound poverty lines are vulnerable households, these are troubling statistics.

You see, saving isn’t just about stashing away money for a rainy day. It’s about taking charge of your future, gaining a sense of self-reliance and peace of mind. The more you save, the less anxious you feel. The more you save, the less frivolous you become. The more you save, the closer you get to making your dream lifestyle a reality.

But let’s be real – the ugly truth for many is that they’re simply unable to save.

But we can’t ignore the elephant in the room. For many South Africans, saving money is an uphill battle. Heck, by the time you hit 35, you’re ideally supposed to have half of your annual salary put away for retirement. And we’re not even counting the emergency fund and the nest egg you should ideally be building for life goals, like a house deposit.

Maybe life until now has been all about scraping by day-to-day. Maybe you’re up to your neck in debt. Maybe someone told you that saving wasn’t a big deal, or maybe you didn’t have anyone to show you the ropes. Regardless of why you’re not saving as much as you should be, remember this: the best time to start is always now.

Let’s rise to the challenge and turbocharge our savings, paycheck by paycheck.

The Debt vs. Savings Dilemma

Here’s the deal: Debt isn’t supposed to cripple your savings. With smart budgeting, you should be able to steadily chip away at your debt while also growing your savings.

Remember the good old 50/30/20 rule? It suggests spending 50% of your income on necessities (think rent, groceries, utilities), 30% on wants (like dining out, shopping, subscriptions), and reserving the remaining 20% for savings. Easy peasy, right? Well, if only life were that simple…

But not many of us can stick to that rule of thumb…

The reality is, many of us find it challenging to stick to this rule. You see, in the real world, debt often worms its way into the “necessities” category. As a result, the 20% that should be going into our savings accounts is often redirected towards paying off debt.

In fact, for many who seek financial assistance or need to go under debt review, it’s not uncommon to see as much as 60% of their total income being funnelled towards servicing their debt. So, it’s time for a bit of introspection: How much of your income is being gobbled up by debt repayments? Download your credit report here to see where you are standing.



If you foresee that your current budget might buckle under the pressure of ongoing debt repayments, considering debt review could be a wise move. This process refashions your debt structure to make repayments more manageable. A debt counsellor steps in to craft a budget tailored to cover all your living expenses, consolidating all your debt into one reasonable monthly repayment. The ultimate goal here isn’t just to help you steer clear of debt, but to empower you to pivot your focus back onto building a robust savings strategy.

Always remember, even in the face of debt, you can still make strides towards your savings goals. It may seem daunting at first, but with careful planning and disciplined budgeting, you can navigate your financial journey successfully.

How to Get The Best Savings Rate

Let’s dive into how you can get the best savings rate! We all know that banks are different, and with those differences come variations in their savings account structures. You really have to do your due diligence before you settle on the right choice. Let me break down what you might come across:

You might find banks that work on a tiered system where your earnings rise as your account balance grows. For example, with a deposit of R2,000, you might be earning a 0.1% interest rate on every R100. But when your balance hits the R10,000 mark, you might see that rate increase to 0.2%.

On the other hand, some banks prefer a time-based system. In this scenario, a R2,000 deposit that sits in your account for a month might get you a 0.1% interest rate. But if you can keep your hands off that money for six months, that rate could skyrocket to 10% or more.

The golden rule seems to be the more, the merrier, and the longer, the better. The more money you have sitting in your savings account and the longer it stays there, the more you stand to earn through interest.

But remember, don’t make any decisions before you’ve got all the facts. Get the lowdown from your bank about the specifics of the savings account you’re considering. Make sure you understand the ins and outs, the potential benefits, and the terms before you make a commitment. This way, you’re making an informed decision that aligns with your financial goals.

Now that you know what to look for let’s chat about some strategies you can adopt to secure the best savings rate:

Shop Around: Don’t just go with the first savings account you find. Take the time to check out what various banks are offering, compare their rates, and watch out for any enticing promotional deals for new customers.

Consider Going Online: Internet-based banks often offer higher interest rates than their brick-and-mortar counterparts. They can afford to do so because their operating costs are lower, meaning they can pass on these savings to their customers with higher interest rates.

Know Your Accounts: It’s crucial to understand the different types of savings accounts and their corresponding interest rates. Fixed deposit accounts, for instance, often offer higher rates but come with the condition of leaving your funds untouched for a specific period. High-yield savings accounts, on the other hand, give you a competitive rate but allow more flexibility with your money.

Keep Those Balances High: If your bank uses a tiered interest rate system, having a larger balance can snag you a better rate. This leads to higher returns on your savings.

Automate, Automate, Automate: Setting up automatic transfers to your savings account means you’re regularly growing your balance, potentially leading to bigger interest earnings.

Stay in the Know: Banks’ interest rates are directly influenced by the national repo rate. If the repo rate goes up, savings account interest rates often follow. So, keeping up-to-date with these economic shifts could help you grab opportunities when rates rise.

Can Saving Affect My Credit Score?

While savings accounts don’t feature on credit bureau reports, a consistent savings habit is a strong signal to lenders of your financial responsibility and your ability to manage credit repayments effectively.

A healthy savings account might open the door to secured loans or credit cards. These products are guaranteed by your savings or a deposit, reducing the risk for the lender and often making it easier for you to secure credit.

Lenders also tend to see customers with solid savings as less risky. As a result, you might find yourself qualifying for more favorable loan terms and lower interest rates, thus granting you access to more affordable credit.

However, when banks and lenders consider your application for credit, your debt-to-income (DTI) ratio often comes under scrutiny. If your DTI is over 60%, consider using your savings to pay down existing debt. This will effectively lower your DTI ratio, making you more appealing as a borrower.

You can view your debt-to-income (DTI) ratio on your credit report here.



Let’s not underestimate the role of savings as a safety net for unexpected expenses. When those surprise costs pop up, a healthy savings account can be your superhero, swooping in to save you from missing payments or defaulting on existing credit responsibilities. And trust me, you don’t want to mess with those, as both can do a number on your credit score and limit your future access to credit.

Now, if there’s one financial boogeyman you want to avoid, it’s defaulting on debt repayments. It’s like the financial equivalent of a horror movie villain – one moment your credit score is happily living its life above 700, the next moment it’s plummeting down to the red zone in a matter of just three months.

Trust us when we say, defaulting on debt is a financial nightmare. It slams shut the doors to credit access, be it for a home loan or any sort of personal credit from respected financial institutions.

If you’re feeling weighed down by rising costs and struggling to manage your debt, debt review could be the lifeboat you need. The trick is getting a trusted expert debt counselor, like Debt Rescue, on your team. If you’re having a hard time meeting your monthly repayments, we’re here to swoop in and save the day. Not only can we prevent you from defaulting, but we’ll also help you construct a solid, manageable budget. We’re all about getting you back on track!

Want in on the top 10 Super Savings Tips for South Africans? Watch them here.

If you feel the crunch of economic stress pounding at your door, it is best to investigate debt review by contacting one of our friendly consultants. Find out how we can assist you.

Debt Rescue has been at the frontlines assisting over-indebted South Africans since 2008. Debt Rescue has managed to help thousands of consumers achieve financial freedom through the debt review process. Contact us now to see how you too can manage your debt affordably.



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