Despite the difficult economic conditions; now is the time to save says Marius Fenwick, Chief Operating Officer of Mazars Financial Services. While there will always be excuses to delay saving for the future; the earlier you start the better.

The later you start saving the more money you will have to contribute to reach your savings goal, particularly if you’re saving for retirement.

By saving a smaller amount per month now, the impact on your cash flow will be lighter as opposed to starting to save in later years where you would have to save more a month to reach your goal. The reason for this is that starting earlier allows your contributions to compound for longer, which adds up in your favour.

As the table below demonstrates, if you save R300 over 25 years you’ll have far more than the R90 000 you’ve actually contributed, thanks to the power of compounding.

It also shows the difference between achieving a 10 percent return per year on your investment versus a return of 12 percent per year.   By achieving just two percent more, your savings will be worth R135 900 more.

If you delay saving for 15 years, and then start, you’ll have to contribute R750 per month to save R90 000 and, because your money will be compounding for a much shorter period, you’ll end up with far less capital irrespective of the investment return.

Fenwick says that even though the markets are in the doldrums, and returns aren’t what they used to be, this is no excuse for delaying saving.

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