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Foolish things you can do with your money

Apr 01 2018 10:13
Angelique Ruzicka

Even though today is April Fool’s Day, I thought I’d lay the practical jokes aside, because the reality is that some of our financial transactions can sometimes be as close to foolish as we can get.

These actions can land us in heaps of trouble. There’s a saying that goes: “A fool and his money are soon parted.” While you may not lose all your money by making these financial mistakes, you could certainly lose some of it and even incur penalties and fines.

Here’s a list of the silly things people do to lose money and solutions to avoid falling into the same trap:


According to Michael Kransdorff, chief economist at investment service My Treasury, most South Africans are being fooled. Over 16 million of us have cash in savings accounts but, according to the latest SA Reserve Bank statistics, a large percentage (about 40%) of this money sits in accounts that offer very low – if any – interest. While you may be enjoying the safety net that some of these accounts offer, the reality is that if you don’t switch, your money won’t grow above inflation.

The solution: “South Africans could be earning as much as 10% on their savings, if they switched to higher interest-paying accounts,” says Kransdorff. Go to to compare options to ensure you get the highest interested based on your needs.


Most new tax changes announced in the budget speech earlier this year will come into effect today. There will be a total 52c per litre increase in the fuel and RAF levy, increases in alcohol and tobacco excise duties of between 6% and 10%, and an increase from 7% to 9% in the excise duty rate on luxury goods.

Products regarded as luxury items and which are subject to the payment of ad valorem excise duties include motor vehicles, electronic equipment, smartphones, cosmetics and perfumes.

The plastic bag levy increased by 12c per bag and the levy on incandescent light bulbs from R6 to R8 to promote environmentally friendly choices. The tax on motor vehicle emissions will also increase from today.

There were no adjustments to the top four income tax brackets and a below-inflation adjustment to the bottom three, offering meagre relief for taxpayers.

The much-discussed sugar tax will be implemented on April 1, in the form of a health promotion levy which taxes sugary beverages.

The solution: Cut your spending on luxury items, don’t drink fizzy drinks, invest in products such as tax-free savings accounts and get financial advice.

Jenny Gordon, Alexander Forbes head of retail legal support says: “The tax burden on individuals has been increasing, but if people planning for retirement use certified financial advisers to help them structure their investment mix well, they are more likely to be able to reduce their tax in their retirement years. South Africans across the board will have to tighten their belts as we settle in to assist the government chart a path out of economic stagnation.”


We all get that feeling when our pay cheque comes in at the end of the month – elation and excitement, often followed by the urge to go out and buy something. We often do the same when a large sum of money, like a tax return or a bonus, comes into our bank accounts.

The solution: While you can spoil yourself, you should do so in moderation and keep the bulk of that money to pay for or save for something practical.

Nthabiseng Moloi, MiWay’s head of marketing, says at least 20% of your income should go into savings, whether this be in the form of an emergency fund, an interest-bearing savings account or a retirement annuity.

“Ideally, 50% should then be allocated towards necessities, with the remaining 30% used for the things you want, rather than need. By applying this 50/30/20 rule, you should be able to effectively carve out a solid chunk of savings over time,” she says.


Half of South Africa’s credit-active consumers are overindebted. Many get into a debt spiral because they use one loan or credit card to pay off another, and so the cycle goes on.

The solution: Stop using credit to pay off debt. Tackle one loan at a time and pay in more than the minimum amount to get rid of the loan faster. If you don’t know how to tackle your debt, ask an accredited financial adviser or debt counsellor to help you get out of the red.


Some people forgo saving into a pension because they think they still have lots of time to save for retirement. Others cash in their pension pot when they are able to do so. Some retirees use their pension lump sum to splash out on expensive trips abroad or around-the-world cruises.

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retirement  |  savings  |  money management  |  debt


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