Avoid over-spending this festive season
At the same time, it’s important to keep a careful eye on our budgets, to avoid getting into serious debt that becomes really hard to repay.
We all work hard for our money and should be able to get enjoyment out of spending it, whether on ourselves or our loved ones.
At the same time, it’s important to keep a careful eye on our budgets, to avoid getting into serious debt that becomes really hard to repay.
This festive season, why not avoid the over-spending rush and cultivate a savings habit by opening a tax-free savings account?
Mpho Ledwaba, Head of Marketing at the JSE, says, “South Africa is known to be a nation of people who tend to over-spend rather than save. Collectively, our debt levels are very high – we seem to spend our salaries to the max, whether we are in higher or lower income bands.
“South Africans were able to open tax-free savings accounts (TFSAs) from March last year. TFSA can be used for a number of different savings needs, including saving towards your dream goals. If you want to buy a new car, or go on the holiday of a life time, the JSE’s TFSA offering can help you get there without getting into massive debt along the way.”
A TFSA is an account that provides tax benefits for saving, and the JSE TFSA provides investors with a way to invest in Exchange Traded Funds (ETFs[1]). ETFs are ideal for first-time investors looking to invest in the stock market as they provide a ‘basket’ of JSE-listed indices by tracking a particular stock market index, such as the FTSE JSE Top 40.
Ledwaba clarifies, “You need a small initial investment amount to begin investing in our tax-free savings account and ETFs provide an easy way for investors to gain exposure to a variety of different types of investment instruments.”
The JSE’s TFSA is only one of many initiatives by the exchange aimed at improving financial literacy and investor education.
The annual JJSE Investment Challenge, , for example, is intended to increase understanding about financial markets amongst high school learners and tertiary students. In addition, the JSE also facilitates Power Hour sessions which are targeted at investors who are already invested in the JSE, but also looking to improve their knowledge of financial markets. There is also online learning modules aimed to teach first time investors about the workings of the JSE.
The JSE is committed to making the exchange more accessible. “Whether it be saving for your financial future; participating in the Investment Challenge or Power Hour session, our intention is to ensure that South Africans establish a culture of investing – it’s crucial that we contribute to creating a financially literate population and investing need not be a daunting task. We hope to make investing easy and more affordable for all South Africans,” concludes Ledwaba.
Key features of the JSE Tax-Free Savings Account
Investors are allowed to invest up to R30 000 per annum in monthly payments and limited to a R500 000 lifetime contribution.
Investors invest in one of the JSE-listed Exchange-Traded Funds (ETFs) which provide diversification by buying into a basket of JSE-listed investment products.
You have the flexibility to either contribute monthly or as a once-off lump sum depending on your needs (limits apply).
No Dividend Withholding Tax on dividends earned.
No Capital Gains Tax.
No Securities Transfer Tax on purchases.
