#AskaFinancialPlanner – How do I start saving for lobola?
Hi Donovan, I have met the girl I want to marry. According to our tradition I need to pay lobola. I would like to start saving before I even ask her, but have a few concerns.
- I am not sure that I earn enough to save monthly. I can only afford a maximum of R1,500 a month and do not have a lump sum to invest. Are banks my only option to save?
- I need to access the money as and when I need it when negotiations between our families eventually begin. What saving options are available that will not penalise me for accessing my money?
- I also want to save some money to go on honeymoon to Vic falls. Can I do this in the same account?
Hi there. Your questions referring to investment amount, penalties of accessing your money and your investment vehicle options are the right questions. The kind of questions any investor should ask!
You need an investment that offers you growth, liquidity or the ability to access your funds as well as the convenience factor of being able to use the same investment for multiple purposes. A bank deposit is not your only option.
You should consider an investment into a Portfolio that will offer you the returns that you require to meet your goal of paying lobola as well as your honeymoon. A unit trust or tax-free investment vehicle will offer you the liquidity as well as growth. Remember that you can and should choose a fund for your money to be invested into that would provide the required growth, given the risk you are willing to take.
You can save for your lobola payment and honeymoon in one account. Remember that your annual savings limit into a tax-free plan is currently R33,000 while a unit trust has no limit.
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Donovan is a financial advisor at Money Wise Associated Financial Services who believes in challenging the status quo on how financial advice is currently delivered to clients. He takes pride in showing his clients that financial and other goals are attainable through appropriate planning and affordable solutions. Donovan has completed his Masters in the field of Financial Economics, Honours in Investment Management with distinction and Bachelors of Economics with distinction.