Like most South Africans, you may consider this month’s national savings campaign to be out of touch with the current tough economic realities. Hard pressed on every side with intermittent power supply, consecutive fuel price hikes, rising interest rates and inflation, the stagnant incomes of many South African households are being further eroded. Under these constrained economic conditions, the idea of saving money may seem daunting and even unfeasible to you.

However, the present time (as difficult as it is) may offer you an opportunity to achieve your financial goals without incurring additional debt. Whether it’s a short-term goal to start an emergency fund, a medium-term goal to save for a deposit on a home or a long-term goal to accumulate funds for your retirement, with the combined power of time, money and compound interest, you can accelerate the future value of today’s savings and investments. Therefore, although we are currently facing increasingly challenging personal economic circumstances, it has never been more important to save.

Naturally, right now, the big question is, how do you save when your salary is already so stretched? With the following savings and investments tips, you may find your way to better financial fitness:

• Have a plan

There is power in writing things down. Set specific, measurable short and long-term financial goals and write them down – this is crucial. Make it a habit to regularly refer to your plan. It will help you maintain the discipline of saving towards your goals.

The foundation of effective personal financial management is the humble budget. If you do not already have one, create a budget detailing your net income after tax, required expenses, discretionary purchases and the periodic savings and investments required to reach your pre-defined financial goals. As the month progresses, you should track your spending by recording your actual expenses against your budget and take proactive measures to remain within the limits of your budget by making changes to your spending habits, where necessary.

• Pay yourself first

As the term suggests, the concept of paying yourself first means that the first payment that you should make each month should be allocated towards your own personal savings and investments. By paying yourself first, you are making a commitment to prioritise your financial goals, before paying for other demanding expenses such as groceries, school fees and transport. To avoid the temptation of spending the money you have budgeted towards personal savings and investments, you can automate contributions to your savings or retirements accounts by setting up bank instructions such as debit orders and stop orders.

• Cut down non-essential items

Identify and cut down unnecessary spending and manage your debt. For example, completely avoid or minimise the use of credit cards as this will help you to save on paying high interest rates and fees.

• Get creative

If you are a shopaholic, you might want to think about putting that money towards savings for a period. When you save, you earn interest on your savings. The higher the interest rate, the more interest you earn, and over time, you can increase your savings substantially. For example, it might be wise to purchase shares instead of shoes. Depending on your financial risk tolerance, you should explore your investment options and invest wisely by building a diversified portfolio.

For day-to-day expenses such as food, avoid impulse purchases by planning your shopping in advance. Consider buying in bulk and be on the lookout for stores (online and physical) that have specials on the items that you intend to buy. If you have a green thumb and a garden space in your home, you can also start your own vegetable garden.

For entertainment, you may consider staying and hosting indoors at home. You may also consider re-evaluating your subscription streaming services. Do you really need Netflix, Amazon Prime and Showmax? Maybe it’s time to pick up that dusty novel.

In conclusion, as the old age goes, “tough times never last, but tough people do.” “Tough people” in this context are financially-fit people who have the financial discipline to plan, prioritise and actively work towards the achievement of their financial goals.

From this perspective, saving during difficult economic conditions will require you to have the audacity to view the present time as an opportunity (and not a threat) to get closer to reaching your financial goals, whether short-term or long-term. Thus, saving is the tough pill that we all need to swallow to not only survive these trying times, but to also secure our financial future. As you learn to exercise your financial muscle, hopefully you will develop better money habits and you will view the present time as a companion in your wealth generation story.

Lethukuthula Ncube is a lecturer in the Department of Financial Management in the Faculty of Economic and Management Sciences (University of Pretoria).