How disciplined saving can secure your financial future

UNLIKE financial freedom - which means never having to stress about money again — financial independence is more about having your own safety net or personal buffer to fall back on during those tough times. It’s a more realistic and attainable goal. Yet the reality is that 45% of South Africans would struggle to cover a R5,000 emergency without borrowing from somewhere or someone, according to the South African Reserve Bank.

- ADRIAAN PASK

And it's not just about handling the immediate financial stresses, but also the future stresses. Whether it’s unexpected medical bills or retirement, your ability to gain financial independence depends on the reserves you start building today.

Start with the basics, as early as possible

There is a massive difference between starting to save at 25 versus 35. Even if nothing else changes, how aggressively you save or how your investments perform, starting 10 years earlier can double your retirement savings, thanks to the power of compound interest.

Compounding allows the money you earn to start generating returns of its own. The sooner you start, the more time your savings have to grow, which means easing the financial pressure later in life. Delaying saving until you're older often means you'll need to put away much more to reach the same goals, and by then, you may not have the resources or energy to do so.

This is the hard reality that many South Africans face. The question to ask is whether it’s easier to reduce spending now when you're young or when you're old and more vulnerable? Unfortunately, one can't have it both ways. You can't spend money indiscriminately in your younger years and still expect to live well when you're older.