Practical Savings
Let’s firstly clear the air – by “practical savings ideas” it
is not about putting money into a savings or transmission or
similar account with a bank or financial institution that gives
YOU the best return on your money.
Practical savings relates to things that YOU are already
doing (mostly on a daily basis) and paying for – we aim to show
YOU how EASY it is to do it a little (or a lot) more
effectively, and by doing so, saving YOU money.
Respect for money
The saying goes: “Money makes the world turn around”.
There is also the saying: “Money cannot buy happiness / luck,
but it sure makes the “misery” a lot more bearable”.
Have respect for the money that you have earned, as there is
also the saying: “Easy comes, easy go”, which means that money
easily acquired is usually wasted because of the lack of respect
for it.
Respect for the “Old” Geniuses (of savings)
We should all have the utmost respect for “Old” Geniuses of
the world (people), as we can learn a lot from them, even if
they do not know why and how things exactly work and even if
they do not have the “high” education levels that we have.
Who are these “Old” Geniuses (people)?
You will find them in each and every home without you or them
realizing it.
“Old” Geniuses or people (that is our parents, grandparents
and even their parents) mostly had the saying: “Don’t buy what
you need, but only that what you cannot do without”.
The wonder of the “Old” Geniuses (of savings)
- In the past families were generally bigger (up to 7
children),
- Everyone got enough to eat,
- Everyone had enough clothes to wear (although some were
“hand downs”),
- Etc, etc.
Ever wondered how they did it?
To be honest, they actually had less money to spend (less
disposable income) than what we have currently.
For example (based on South African information):
1988
We are giving an example in terms of motor cars as people
often says that cars are one of the items that increased in
price beyond most other items.
In 1988, the average family sedan cost about R 26,500. This
car had no “frills, luxuries or gadgets” such as electric
windows, ABS brakes, power steering, air conditioning, airbags,
radio / tape / CD, etc. It was really just the basic, average
family sedan.
In 1988 a married person earning R 26,500 per annum (equal to
the car’s price) were in the 34% tax bracket.
Current (2005) two scenarios
Firstly if we increase the R 26,500 from 1988 at the annual
South African CPI% (the lower end of what people would get in
salary increases), then the equivalent annual salary today is R
108,712.
Secondly if we increase the R 26,500 from 1988 at the annual
CPI% + 2% (reasonably what people would get in salary
increases), then the equivalent annual salary today is R
148,254.
Just do yourself a favour and see the range of cars available
between R 108,712 and R 148,254. Important to note when looking
at these cars is the level of “frills, luxuries and gadgets”
that in standard to each car. A lot of the cars are fitted with
electric windows, ABS brakes, power steering, air conditioning,
airbags, radio / tape / CD, etc.
Also up to an annual salary of R 130,000 the South African
tax bracket (2005/2006) is 25% and up to R 180,000 the South
African tax bracket (2005/2006) is 30%.
Thus the average after tax income is 4% to 9% higher than in
1988.
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