Cutting back on coffee could save you some money

Staff reporter

October 1, 2018

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Johannesburg – The appeal of foamy cappuccino or steaming espresso is strong, but remember that this experience is short-lived. By sacrificing just one cup of coffee a day, you can save enough money over time to help build useful reserves, especially if you put those savings in a tax-free savings account (TFSA).

A study on the financial status of employed millennials commissioned by Old Mutual found that only 44% of people invest in pensions or provident funds, and they prefer to use their money for retirement later in their working lives. 

At the same time, the 2018 Old Mutual Aid Savings and Investment Monitoring Report shows that two-thirds of baby boomers have no formal retirement fund provision.

 "With a tax-free savings account, you don't have to pay income tax, capital gains tax and dividend withholding tax on the interest generated. This means your money can grow freely," said Marius Pretorius, head of marketing for retail savings and income solutions.

 "The popularity of tax-free savings accounts also lies in their flexibility and accessibility. You can withdraw your funds at any time without any penalties and can be accessed through most major financial services companies and banks."

 But this is the capacity of TFSA, this is its best function. "You can use the old mutual benefit maximizing interest fund to open a TFSA at a price as low as R200. In addition, you can open a TFSA online through 22seven, phone or financial advisor. This is very convenient and almost effortless.

 "So even if your budget is tight, now is the time to start saving habits and sign up for TFSA. If you save R500 per month like this and increase your contributions at a rate of 5% per year, your investment may be possible in 10 years It will increase to more than R100,000*. Then you can reinvest it for retirement, use it for housing savings or pay for your child’s first year of college."

 Pretorius pointed out that in the past few years, coffee culture has rapidly become popular in South Africa. Earlier this year, international chain Starbucks joined hundreds of coffee brewers in South Africa. The barista is providing coffee beans sourced from Kenya, Brazil, Ethiopia and other exotic regions, and skillfully making latte art.

 "Yes, quality coffee is a delicious choice, but should you really spend that much money?" he asked. "If you buy two or more cups a day, please be strong and become a resistor! On October 1st, International Coffee Day, tackle the challenge and start reducing your intake-and then use the money saved for financial security. Being calm and drinking less caffeine can also ensure better sleep." He said. 

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