There are many ways in which you can make the money you save work for you. One of the ways is using a tax-free investment account. Here are five tips to help you to get you started.
1. Build a buffer
Build your savings by planning ahead. Maybe you’re a matric student who plans on taking a gap-year. If you start saving now, you will be reaping the benefits in a year’s time and you’ll be able to go on that trip, guilt-free.
2. Pay off debt
A great way to maximise your savings is to pay outstanding debt such as car loans and credit accounts before pushing the money into your investment account. You can consolidate your debt into a single loan, which normally results in a reduced monthly payment to the lender or financial institution at a lower interest rate.
3. Reduce taxes
If you are currently paying tax on your savings account, it is advisable to transfer these funds to a tax-free investment account in order to see more growth and exempt yourself from tax payments on that account.
4. Save for your children
You can secure the future by opening up a tax-free investment account for your little one. Even if you don’t have children yet, you will have built up some capital to work with once both your child and the account reaches maturity. Tax-free investment accounts are great for future educational costs as well.
5. Wait until the account matures
Don’t make the mistake of making an early withdrawal from your tax-free investment account, there is no benefit if it doesn’t reach maturity.
Even if you aren’t sure exactly what you want to save for, save anyway! Tax-free investment accounts will help you develop your finance skills and you can practice delayed gratification and self-control! Make use of this finance vehicle to put an egg in another basket – and reap the benefits when it hatches.