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Savings Tips for Young Professionals this July

Adopting good savings habits is a crucial step in securing your financial future. As a young professional, it is particularly important that you keep to your savings goals even during times of economic uncertainty. July is celebrated as Savings Month and serves as a good reminder of how important it is to be financially resilient.
The good news is that according to the latest Kantar Mzansi Barometer, South Africans are becoming more prudent in terms of shopping habits, household budgeting and savings; in general we are saving more now than what we did a year ago.

In a challenging economy, underscored by a high unemployment rate, trying to save may seem daunting and sometimes near impossible. However, being proactive in your approach to financial matters is key to establishing a firm foundation for your future financial well-being. While you consider your options, it is good to remember that savings habits vary from person to person; some set mid-term goals while others prioritise saving a portion of their income for long-term goals such as retirement. 
Due to financial obligations, many people need help to establish consistent saving habits. In the case of young professionals, factors such as student loan debt, essential living expenses, and limited job security can impact the ability to save. 

Why not use this Saving Month to take stock of your financial situation, reflect on your financial choices, and improve your savings habits? PPS, the Professional Provident Society, is a financial services company focused on providing intelligent financial solutions for graduate professionals. We encourage individuals to look at their spending patterns, set achievable savings goals, and adopt strategies to navigate the challenging economic landscape. 

Tips for saving during an economic downturn:

• Set clear savings goals: Define specific short-term and long-term savings goals. This clarity will help you to stay focused and motivated during challenging times.
• Create a realistic budget: Develop a budget that aligns with your income and expenses. Prioritise essential expenses, reduce unnecessary spending and find areas to cut back on.
• Embrace the 50/30/20 Rule: Allocate 50% of your income towards necessities, 30% for discretionary spending, and 20% for savings and debt repayment. Adjust the percentages based on your unique circumstances.
• Automate savings: Set up automatic transfers from your salary to a dedicated savings account. This strategy ensures consistent savings without relying on willpower alone.
• Reduce debt: Prioritise paying off high-interest debt to free up cash flow for savings. Consider debt consolidation or negotiation with creditors to ease the burden.
• Seek additional income opportunities: Explore part-time jobs, freelance work, or side hustles to supplement your income. Utilise your skills and passions to generate extra revenue.
• Cut expenses: Identify areas where you can cut back
• Seek professional guidance: Consider consulting with a PPS-accredited financial adviser who is a specialist in assisting graduate professionals. They can provide personalised advice based on your circumstances and help you to create a comprehensive financial plan.

While being a young professional in South Africa presents its challenges, it is vital that you confront these obstacles head-on and take control of your financial future. By implementing the practical tips outlined in this article and staying committed to your financial goals, you can overcome these challenges and build a solid foundation for long-term financial success. Remember, financial wellness is a journey; with perseverance, you can secure a bright and prosperous future.

Disclaimer: Kindly note that this does not constitute financial advice, and the information provided is included for illustrative purposes. In terms of the Financial Advisory and Intermediary Services Act (FAIS Act), an FSP should not provide advice to investors without an appropriate risk analysis and thorough examination of a client’s particular financial situation. The information, opinions, and communication from PPS or any of its subsidiaries, whether written, oral, or implied are expressed in good faith and not intended as investment advice, neither do they constitute an offer or solicitation in any manner. Professional Provident Society Insurance Company Limited is a licensed insurer conducting life insurance business, a licensed controlling company, and an authorised financial services provider.