What if there was a simpler way to budget?

1024 683 Mandy Freeman

Published on Capitec, 27 July 2022

More month left at the end of your money? It’s time to whip your budget into shape and track your spending.

Budgeting is important no matter where you are in your life. You need to know how much money is coming in and what your monthly expenses are. Remember the days when drawing up a budget required some Excel know-how, valuable time wasted recording all receipts and invoices and crunching numbers? Luckily that’s a thing of the past with the many apps and tools available today.

Budget 101

When you draw up a budget, it’s recommended that you follow the 50/30/20 budget principle. How this works is simple: 50% of your household income should go towards essential expenses, 30% towards financial priorities, and 20% towards lifestyle choices.

You should spend no more than 50% of your income on essential expenses such as:

  • Home: 25% (rent, home loan, insurance, maintenance and garden)
  • Transport: 10% (fuel, insurance, car finance and maintenance)
  • Food: 10% (groceries and cleaning supplies)
  • Utilities: 5% (water and electricity)

At least 30% of your income should be used to take care of financial priorities:

  • Saving: 10% (holiday, nest egg and investments)
  • Retirement investments: 10% (retirement annuity and pension fund)
  • Financial services: 5% (personal loan, credit accounts and bank charges)
  • Medical expenses: 5% (medical aid, medicine, doctors and other treatment)

No more than 20% of your income should be used for lifestyle choices. That is, things that are nice to have but not essential:

  • Entertainment
  • Personal care
  • Clothing
  • Hobbies
  • Dining out

Why you need to track your spending

Even with a budget, extra expenses can creep in. When you don’t pay attention to them, you might not realise how much you’re actually spending in a month. Have you remembered to add that takeaway coffee you buy every morning on the way to the office? How about the flowers you bought for your mom? Or the data top-up you needed? All these extra expenses add up, quickly.

To avoid having your money run out before the end of the month, you need to track your spending. It will allow you to adjust your budget where necessary.

How to track your spending

On the new Capitec banking app, you can get a quick overview of where your money goes with the help of different categories like food, transport or communication. Plus, this can help you plan and manage your budget, giving you more control over your money. All from the comfort of your couch and all in one place.

The app is easy to use. Simply tap on your savings account to see what money has come into your account and what has gone out. Want to view your spending categories? Tap on the ‘track’ tab to see what you have spent money on. All money you’ve spent is automatically categorised to give you a clear picture of your spending habits. If the app allocates something to the wrong category, you can change it. The app will then ‘learn’ and won’t make the same mistake again.

Once you start to track your spending habits from one month to the next, you’ll soon be able to identify unnecessary expenses that you could cut back on.

Banking. Now even simpler

Get the new Capitec banking app and automatically categorise your transactions so you can easily track your income and spending habits.

Investing 101 with EasyEquities

1024 683 Mandy Freeman

Published on Capitec, 22 July 2022

Have you been thinking of starting your first investment? The good news is it’s super simple with the Capitec banking app and EasyEquities widget.

When you think about investing, business people in stuffy suits in a busy office might come to mind. What if we told you investing is something anyone can do? And it’s the way South Africa’s up and coming are making their money work for them. You don’t need to have a finance degree to get started. You have direct access to the widget through the Capitec banking app where you can start investing from as little as R5.

You’ll be able to buy shares on both the South African and US stock markets, and save 20% on the commission you would pay when you make an investment. If you are already an EasyEquities user, it’s easy and secure to link your profile on the Capitec banking app.

We’ve partnered with EasyEquities so that we can help you improve your financial life by providing simple access to easy investing.

Investing is for anyone

Capitec client Yolande de Beer, 33, says she was looking for an alternative to opening a normal bank savings account or investing through a financial services provider.

“I had absolutely no investing experience at all. After doing research online, I found some interesting information and reviews on EasyEquities. As I already have the Capitec banking app, I simply used the EasyEquities widget to invest in a company that was affected by the COVID-19 pandemic as the share prices were cheaper. I believed it would pay off in the long run.”

And it did for Yolande. “I’ve seen growth of more than 7% on my investment so far,” she says. “It also means I have immediate access to my money, if need be, unlike most high-interest savings accounts that have a notice period for withdrawing funds.”

Understanding investment terminology

Before you dive into the world of investing, it’s important to understand the 4 different types of investments available to you through the EasyEquities widget on the Capitec banking app.


What they are: Also known as stocks or shares, equities are the most simple and well-known type of investment available. In basic terms, equities allow you to invest in actual companies.

How they work: When you buy equities, you’re essentially buying a tiny portion of a company, such as Capitec, Dis-Chem, Pick n Pay or Vodacom. If the share price goes up, you have the opportunity to sell and potentially make a profit. However, if you sell after the share price has gone down, you could lose a percentage of the amount you initially invested.


What they are: Exchange traded funds, or ETFs, are a collection of companies or shares either made up of different industries or isolated to a single industry or sector. ETFs are a great way to invest. They’re relatively cheap to buy, easy to invest in and offer the diversification benefits of unit trusts. The difference between an ETF and an unit trust, however, is that ETFs are listed on the stock exchange, so you can buy or sell them at any time of the day. Unit trusts, on the other hand, are not and prices are only set at the end of the day.

How they work: You can buy an ETF with a single transaction, which gives you exposure to many different companies. Because a single ETF holds shares in different companies or industries, your risk is spread. You can also choose whether you’d like to invest in South African or overseas companies.


What they are: Exchange traded notes (ETNs) are essentially unsecured corporate debt, which means you aren’t buying a collection of assets like you would with an ETF.

How they work: An ETN works like an IOU from a bank. This note indicates what you’ve bought and puts you in line for a potential payout when it matures. With an ETN you won’t own anything but will hold the debt, in the same way a home loan works. The difference between what you paid for the note and sale price of the underlying commodity is your profit.


What they are: Cryptocurrencies are digital currencies like Bitcoin and Ethereum. They are secured by cryptography, making it virtually impossible to counterfeit. You can buy or sell them on cryptocurrency exchanges and in some instances use them to pay for items or services.

How they work: EasyEquities gives you access to 10 cryptocurrencies, which helps to diversify your investments. In a nutshell, you can buy tokens on the EasyEquities platform and they are then kept for you by DCX10. This means your cryptocurrency tokens are kept secure off the internet, which puts them out of reach of hackers. Just keep in mind, though, the value of cryptocurrencies fluctuate quite radically, which makes them a risky investment.

Simplify your life. Invest with EasyEquities

“Being able to use my Capitec banking app to access the EasyEquities widget gives me complete control over my funds and means I can cut out the middleman,” Yolande says.

Her advice to newbie investors is simple: “Do your research before you decide to invest. COVID-19 has had a harsh effect on our economy and on our own budgets, but we can take advantage of current low share prices to invest in local companies. Take that leap of faith. It was worth it for me.”

Use the Capitec banking app and get access to investing in shares through EasyEquities. You can invest as little as R5. Investing made simple, convenient and affordable.

*This EasyEquities user story does not constitute financial advice. The user was also given an EasyEquities voucher for their participation.


Investing really is as simple as 1, 2, 3

1024 683 Mandy Freeman

Published on Capitec, 22 July 2022

Investing can be for everyone. And you can start today with as little as R5 using Capitec’s banking app and EasyEquities widget.

His investing career started at the age of 11, when he bought three shares for $38 each in a company called Cities Service Preferred on the stock market. He’d go on to sell those shares for a $6 profit. Today, Warren Buffet is 90 years old and considered one of the most successful investors in the world.

But it’s 2021 and investing is not just for the Warren Buffets of the world. Capitec, in partnership with EasyEquities, has made investing simple and accessible to everyone, no matter your age or financial experience.

When you download the new Capitec banking app and activate the EasyEquities widget, you’ll be able to invest securely from anywhere, at any time. You can start investing immediately from as little as R5 and, as a Capitec client, you’ll save 20% on the commission you would pay when you make an investment. Already have an existing EasyEquities profile? It’s simple and secure to link to it on the Capitec banking app.

No investment experience? No problem!

It’s completely understandable if you’re wary of investing your hard-earned money on the stock market, especially when you have zero experience. Fortunately, the new Capitec banking app gives you access to the EasyEquities’ widget, which has a demo account allowing you to practice.

As a new user, you’ll get a demo account with a balance of R100 000, which you can use to play around on the Johannesburg Stock Exchange. This will allow you to get a feel for how markets perform while monitoring your profits and losses without the risk of losing any real money. You can also try your hand at the US markets by investing the $10 000 in your demo account.

Once you have a better understanding of how the stock market works, you can use your own money to invest for real. And the best part? You can start investing from as little as R5.

Simplify your life

Capitec client Afuah Asare-Baah, a 21-year-old accounting student from the Eastern Cape, had been thinking about investing for some time but didn’t want to go through the hassle of finding an affordable broker. “Since EasyEquities was already on my Capitec banking app, I thought it would be more convenient to just use it instead,” she says. “I also realised that the investing fees were a lot cheaper. The fact that it’s associated with Capitec also gave me the impression that it is a reliable platform.”

“EasyEquities is easy and safe to use. The Capitec app already has good security measures in place so I don’t have to worry about someone accessing my investments fraudulently.”

Diversify, diversify, diversify

Although she has no experience with investing, Afuah used the knowledge she acquired as an accounting student to help her choose the best investments. “You need to do a lot of research before investing in a company,” says Afuah. “Don’t just follow your gut. And never put all your eggs in one basket!”

She’s not wrong. Diversification is one of the simplest ways to boost your investment returns while reducing your overall risk. In fact, the Nobel prize-winning economist Harry Markowitz once said, “Diversification is the only free lunch in investing.”

When you diversify your investment portfolio, you reduce your overall risk while increasing your potential for overall investment growth and returns. Some of the time some assets will perform well, and others won’t, but a year from now, their positions might very well be reversed.

Invest for the long term

Another important factor in successful investing is that it has to be for the long term. Historically, shares typically produce positive returns over longer periods of time that can offset the short-term risks. If you can, hold on to your investment for at least 10 years.

In his 1989 book One Up on Wall Street, Peter Lynch, a highly successful portfolio manager, wrote, “If I’d bothered to ask myself, ‘How can this stock possibly go higher?’ I would never have bought Subaru after it had already gone up twentyfold. But I checked the fundamentals, realized that Subaru was still cheap, bought the stock, and made sevenfold after that.”

In essence, what he’s saying is this: you should consider investing based on future potential instead of past performance. Although large short-term profits are tempting when you’re new to investing, experts all agree that investing for the long term is essential to greater returns and success.

Simplify your life. Invest with EasyEquities

Use the Capitec banking app and get access to investing in shares through the EasyEquities widget. Investing made simple, convenient and affordable.

*This EasyEquities user story does not constitute financial advice. The user was also given an EasyEquities voucher for their participation.


What you should know about the two-pot retirement system

1024 683 Mandy Freeman

Published on Sanlam Reality, 27 November 2023

When the two-pot retirement system comes into effect, here’s what you should know.

Reading time: 3 minutes

Why the change?

The idea behind the two-pot retirement system is to help South Africans preserve their retirement savings when changing or leaving a job. But it’s also being put in place so that people have access to a savings fund should they face financial difficulty and need an extra boost of money.

Unpacking the two-pot system

The two-pot retirement system has two separate portions.

1. 1/3 = your savings pot
When it comes into effect, your savings pot will receive a once-off boost from the vested component of your retirement fund –  this is the money you’ve already saved towards your pension fund. The vested amount will be a minimum of 10% but capped at R30 000. That means – if your retirement fund has R30 000 in it, only R3 000 will be transferred to your savings pot. After that, one-third of all new contributions will go into this pot. You’ll have access to this pot if you need the money in case of an emergency. You can withdraw:

  • 100% of this money at any time before you retire
  • From it once a year and will be taxed on this amount
  • A minimum of R2 000; while the maximum is the full amount you have in your savings pot

2. 2/3 = your retirement pot
Your retirement pot is made up of the other two-thirds of your contributions, which you won’t be able to touch until you’ve reached retirement age (from the age of 55). So, what does this mean in rands and cents? If, for example, you put R3 000 towards your pension, R2 000 will go to the retirement pot, and R1 000 to the savings pot. However, you won’t be able to access this R1 000 in your savings pot until the balance reaches a minimum of R2 000. Keep in mind, though, that the money you can draw from your savings pot excludes all contributions you’ve previously made, when it comes into effect.

Understand the tax implications

Any withdrawals you make from your savings component are taxable – this means it’s added to your income tax, and you’ll be taxed at whatever your tax rate is for the year.

For instance, if you earn R300 000 a year, pay 26% income tax and withdraw R10 000 from your savings pot, R2 600 will be deducted and paid to SARS.

The good news, though, is if you wait until retirement before tapping into your savings pot, the first R500 000 will be tax-free.

Try not to withdraw from your savings pot

While it might be tempting to dip into your savings, especially during tough financial times, remember that compound interest needs time to work. It’s often called the eighth wonder of the world because earning interest on the interest you have already earned is pretty much money for jam.

“Compound interest is a magical thing, but we can only see its true potential if we start now, rather than later,” explains Farzana Botha, Segment Marketing Manager at Sanlam Risk and Savings. “Starting to save now means you will have the opportunity to leverage time and compound interest to grow your money.”

You should only access your retirement savings as a carefully considered last resort. If you find yourself facing financial difficulties, speak to your financial planner, who can help you make the right decision for the long term.

Speak to your financial planner to understand how the two-pot retirement system will affect you. Together, you can work towards your retirement goals.

*Information correct as of 23 November 2023.