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Balancing your savings

27 Jul 2020

When your health and safety are constantly on your mind, and you're fearful of what might happen if you or a loved one fall sick, it's time to consider the options of how you can make your life more secure.

For starters, it's important to feel comfortable that you can provide for your needs and those of your family – both now and in the future. This means spreading your hard-earned cash in ways that will take care of everyday expenses, emergencies and longer-term goals.

Right now, for example, you may be focusing only on one goal, such as ensuring your loved ones will be looked after when you are no longer there. This means your money may be going largely into funeral and life cover. But it's also important to look at other goals, so that you're able to fill your car with petrol and pay school fees; have cover should you be diagnosed with a dread disease; can get by if you're unexpectedly retrenched; are able to take that big step to buy a new house or car; and can retire at the age you always planned to.

Here are the best ways to adjust your goals

Low-cost savings accounts

  • A general low-cost savings account
  • Flexible accounts - choose the amount you want to invest and the length (term) of your investment
  • Fixed-term savings – the term of your investment is fixed. You cannot withdraw money before the term is up, but you gain more interest
  • Tax-free savings accounts – you pay no tax, allowing your money to grow faster than a regular savings account. You can make contributions as often as you like (although there are yearly and lifetime limits) and withdraw money if needed (remember doing this will lower your returns)1 .

Unit trusts

A unit trust is a collective investment that pools investors' money into a single fund managed by a fund manager. Unit trusts are a simple, economical and safe way of growing your money, provided you are prepared to hold your unit trust investment for long term. They combine these benefits:

  • Affordability - unit trusts are designed for ordinary income earners. You don't need huge sums to invest.  Amounts vary but start from as little as R100 per month.
  • Easy to sell  – if you need cash immediately, your unit trusts can easily and quickly be sold and converted back into cash.
  • Professional fund management – your investment is managed by skilled and knowledgeable specialists who will keep you updated on performance.
  • Investment growth – there is more opportunity for your money to grow because it is invested in a wide range of stocks or shares. You can also choose how much risk you want to take on, depending on your income and needs.

Where and how do you start?

Starting right now:

  • Say no to debt – reduce any debt you have and don't take on more
  • Keep to your investment – be committed and consistent
  • Don't put all your eggs in one basket – balance your investments to provide for all your needs
  • Switch investments if your needs change
  • Start now – it's never too late to start saving
  • Invest smartly – invest according to your needs and budget
  • Get expert advice – Liberty has a range of specialists to help you invest in the best possible way for your needs

Start your new investment plan now and make sure that you and your family are looked after. With a new balance of goals, you will be able to live more comfortably every day, have funds for important longer-term expenses and be prepared for any emergencies that arise.

Sources:

  1. Moneyweb, www.moneyweb.co.za
  2. Jackie Cameron, 'Five great reasons to invest in unit trusts', biznews.com
  3. Policy Bazaar, www.policybazaar.com


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Liberty Group Limited (Reg. no 1957/002788/06) is a licensed Insurer and an Authorised Financial Services Provider (no 2409).

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