Financial Lessons to Learn from 2021

2021 brought with it many financial lessons – and from renewing your commitment to savings to securing your online banking, our easy-to-follow tips can help you make the most of 2022.

Renew your commitment to savings

After almost two years of restrictions and measures to control the COVID-19 pandemic, many regulations around work, trade, and gathering have been lifted – meaning that as restrictions ease, it can potentially be easier to generate additional income.

For that reason, 2022 marks a great time to renew your commitment to growing your savings, which you could use to fund your goals or dreams or establish an emergency fund.

Learn new money habits

Ensuring that you keep a healthy credit score, maintain cost-effective bank accounts, and are charged less for account fees are all effective ways to save money. As we enter a new year, now marks a great time to put these learnings to use.

Find cheaper ways to withdraw cash

Many banks now offer different means to withdraw cash from your account more affordably – meaning that you could potentially save money when you next need to withdraw cash. Explore your bank’s fees and offers to determine the most affordable way to withdraw cash – whether that means using an ATM or instead withdrawing from a cashier point.

Find cheaper bank accounts

2021 saw many newer digital banks reach South Africa, which offer competitive account and transaction fees. If you’re able to, consider investigating whether you may find a better deal with a more affordable account structure elsewhere that might suit your needs better.

Cut up store cards

If you have a store card from a fashion or homeware retailer and your credit account is paid up, it can be in your best interest to close your account and cut up your card. Retail credit can charge both high interest rates and account fees – meaning that even purchases made on smaller items can add up over time. Reducing your debt – and keeping your active credit accounts in good standing – are both vital measures to ensure that you maintain a good credit record.

Review your credit report regularly

A healthy credit report ensures that you can access finance when you need it most – and for that reason, it’s vital to ensure that you regularly have oversight of your report and flag any errors or omissions. Under South African law, everyone has the right to view their credit report free of charge once a year – however, services such as ClearScore can enable you to review your report whenever you wish.

Make sure your tax affairs are up to date

The South African Revenue Service (SARS) manages all tax affairs within our nation, and continuously updates its rules and guidelines as to how citizens can responsibly pay their taxes.

The income tax threshold for 1 March 2021 – 28 February 2022 is R87 300 if you are younger than 65 years – meaning that if your gross salary exceeds this amount, you are liable to pay tax.

As SARS updates its rules into the new year, it’s vital to ensure that your tax affairs are up to date so that you don’t incur penalties or fines for non-compliance.

Secure your online banking and financial tools

More sophisticated and targeted financial scams emerged in 2021, meaning that it can be easier than ever to be fooled into becoming a victim of fraud. The unfortunate reality is that the best defence you can make against scammers is to ensure that you carefully review communications such as email or text messages, verify ‘offers’ or ‘deals’, and keep your devices and passwords as secure as possible.

Make sure your online banking app/site passwords are secure

One simple method you can use to secure your online information is to ensure that any passwords you make use of are sufficiently long and complex, and preferably contain a mixture of upper and lower case characters, numbers, and symbols. A unique trick, if your account provider allows it, is to make sure that your password contains a comma – “,” – where possible, which can help interfere with a hacker’s ability to pull your password from a list should they be able to compromise a website’s user credentials

However, creating a secure password is only the beginning – adding a second layer of security, called two-factor authentication or 2FA, requires you to approve online sign-ins from a second device such as a mobile phone. This can help secure your account in the event your password is compromised.