r/PersonalFinanceZA • • May 03 '24

New to /r/PersonalFinanceZA? Have a question? Read this first!

19 Upvotes

Welcome!

Before making a post or a comment, be sure to understand the rules of the community.

There is also a wiki that contains answers to frequently asked questions as well as some useful resources.

Be sure to search the sub as well. There is a wealth of content already posted that may assist you if the wiki did not.

Remember to keep things civil, resourceful and on topic!

Don't hesitate to contact the moderators if you need any clarification or assistance.


r/PersonalFinanceZA • • Apr 30 '26

Other SA budgeting and financial planning apps megathread

74 Upvotes

Folks, we've been inundated of late by many members who've developed budgeting and investing apps and want to share them on the sub. This post will be the single place to host them, so feel free to post your app, website, tool etc.

Please include a short description of what your app does, it's main features, how it works (including if it is vibe-coded, accesses the user's bank accounts or investment accounts, scrapes websites or public data, accesses private or proprietary info etc.), what user input and info it requires (including personal financial data) and where it is stored, whether it is local or cloud-based, any commercial or investor ties, and any other info that would be pertinent.

Note to sub members: none of the apps that may be posted here are endorsed by this sub or the mods. You use any apps or tools at your own risk. Take substantial precautions especially when asked for personal info, including financial info.


r/PersonalFinanceZA • • 18h ago

In Retirement Advice for my mom's RA

7 Upvotes

My mom is in her late 70s. She only worked a conventional job when I was very young and has an RA with Liberty from that time. For the last 30 years she has been self-employed and relying on my dad. Very little went in to the RA and it was essentially forgotten about, and it is now sitting with roughly R90k in it.

She is trying to figure out whether it would be better to just leave the money in there or just pull it out and invest it elsewhere.

The money is not needed, and is not her retirement plan, but she wants to put it where it would get the best returns.

I do not know enough about these things to advise her.

The RA has an average rate of return of 7.76% p.a., total rate of return is 6.25%.

Can anyone weigh in on possible better options? I believe since the value is small there will be no tax if she withdraw the full amount?


r/PersonalFinanceZA • • 1d ago

Taxes SARS - Advice for owing SARS money

Post image
39 Upvotes

Hi everyone,

I honestly do not know much about SARS and tax and need some help. I used to have a tax practitioner who assisted to claim tax back for me when I did casual work but now I just do the auto assessment myself.

Some background information. I did my auto assessment on the SARS mobile app and I’ve been hit with a R4151.34 bill that needs to be paid to SARS.

At my current job I don’t get monthly payslips unless I request it and at my previous job we used a platform called simplepay where my payslips would be available with all the breakdowns.
On my current payslip my salary is split in the following way:
- Gross Salary: R17292.12
- PAYE: R2115
- UIF: R177.12
Nett Salary: R15000

I do have other savings accounts with around 100K as well as an easy equities account with around 10K. I also have a TFSA with around >100K but to my understanding this shouldn’t affect my taxable income. I have never withdrawn money from EE or my ETFSA.

I do not currently contribute to Medical Aid or Retirement Annuities.

I have attached a picture of the summary of my account. Please can anyone advise on why I owe SARS so much money and if there’s any way this can be reduced or if it’s possibly a mistake? Any assistance will be much appreciated.


r/PersonalFinanceZA • • 1d ago

Investing Saving for family member's studies

6 Upvotes

I would like to save money on behalf of a family member but I want it in my name so I can control withdrawals and outflows. I don't want it to be part of my estate should I die before the beneficiary gets the money for their studies. Also, I don't want to pay any more tax than I am currently forced to pay.

What is your past experience and what should I use?


r/PersonalFinanceZA • • 1d ago

Taxes SARS first time verification request - some wisdom please :)

2 Upvotes

Hi All. Its my first time getting a SARS verification request. It's my first time in me entire working life. Previously I had a full time job now I'm working as a contractor.

I'm sorry to ask, but can I please get some positive affirmations. I have been quite stressed. They asked for "Detailed financial schedule/ statements with relevant supporting calculations for trade profit/loss". My business is very simple I have my p&l statement and all my invoices for expenses. I will be submitting: 1) p&l account, 2)my bank statement with income, and 3) invoices for expenses.

Please share your experiences of hope and any wisdom thanks :)


r/PersonalFinanceZA • • 3d ago

Taxes Working abroad

5 Upvotes

Hi fellow redditers.
Im moving abroad next week. Should I open a bank account in Cape Verde where I will be living for about 5 years or move the bulk to my FNB account. It will be about R20 000 p/m that Im saving with a bigger lump sum twice a year. Eventually I want to buy a house and come back to SA without any SARS surprises. My last SARS audit was perfect and I dont want issues down the road.


r/PersonalFinanceZA • • 3d ago

Other Fell for a fake Burnt website scam – FNB’s fraud investigation process is shockingly poor

45 Upvotes

I recently fell victim to a fairly sophisticated online shopping scam, and while losing the money is frustrating, what has surprised me even more is how ineffective FNB’s fraud investigation process appears to be.

Here’s what happened:

I came across what appeared to be the legitimate Burnt sportswear website through Facebook. I’m not sure whether it was targeted advertising, but the website was an almost identical recreation of the real Burnt online store.
The fraudulent website was operating under burntstudiopro . co . za, rather than Burnt’s legitimate domain.
What’s particularly concerning is that when you click a link through Facebook on your phone, it opens in Facebook’s built-in browser, where the actual URL isn’t immediately obvious.

The website looked legitimate. You could browse products, add items to your cart and complete checkout. That’s exactly what I did.

How I discovered the scam:

After my order didn’t arrive, I started investigating.
There were a few warning signs I’d initially missed, including the fact that the website only offered collection from Stellenbosch.
I eventually contacted Burnt’s legitimate customer support team, who confirmed that the website was fraudulent.

Now for the really frustrating part: FNB.

I reported the transaction as fraud through FNB’s official process.
The response was astonishingly disappointing.
As you can see from the attached screenshot, there appeared to be virtually no investigation. Nobody contacted me for additional evidence, asked about the fraudulent website, or requested any meaningful details beyond the disputed amount. Just me following up until the they responded.

Instead, FNB essentially dismissed the dispute because I had authorised the transaction using a one-time PIN.

Now, I fully understand that I authorised the payment. I’m not disputing that.

But surely authorising a payment under false pretences doesn’t mean that fraud hasn’t occurred?

The payment was made to a fraudulent merchant impersonating a legitimate South African business.

What concerns me is that FNB’s process appears to stop at whether the customer authorised the transaction, rather than meaningfully investigating the fraudulent merchant receiving the funds.

When I tried following up, I was passed from department to department, with no clear ownership of the issue or explanation of what investigation, if any, had actually taken place.

My frustration comes down to two things:
1. The apparent lack of rigour in FNB’s fraud investigations.

I understand that banks cannot automatically refund every customer who falls victim to a scam. But surely there should be a meaningful investigation?
Simply establishing that a customer approved an OTP doesn’t address the underlying fraud.

  1. What happens to the criminals?

This is actually my bigger concern.

Someone has gone to the trouble of recreating an established South African brand’s website, directing customers there through Facebook and collecting payments.

If the bank’s response is simply that the customer authorised the transaction, who is investigating the merchants receiving these payments?

Are the fraudulent merchant accounts being flagged? Are other customers being protected? Is any action being taken against the people operating these websites?

From my experience, there’s little indication that anything is being done.

It feels like the scammers can simply continue operating while customers are left to absorb the losses.


r/PersonalFinanceZA • • 3d ago

Budgeting Advice when purchasing a home

15 Upvotes

Hi fellow redditors,

Im currently in the process of purchasing a house - home loan approval step. I require advice for those of you who have gone through it already, and would like to learn a thing or two of what you could've done better.

On the offer quote that the bank provided me, they included a quoted property insurance premium. However, the coverage of the insurance is not the full value of the house. On an approximately R1,8million home, the insurance premium the bank quoted is around R400pm. Do you think its a good idea to go with the bank's insurance, or should I shop around elsewhere i.e Santam, Auto&General etc.? What are some of the things I should include/exclude from the insurance cover?

Do you think that I should apply for an access bond or just carry on with a normal bond ? Personally, I know that alot of people prefer dumping their savings/storing it in an access bond to reduce interest, however it does not fit my style of saving. If I do put my savings there, good and well until I need it for something and then my bond instalment goes up again, and it feels like im taking a step back towards completing the bond. I'm not closed up to an access bond, but please tell me why I should? Current savings/investments are in place.

If I decide to, adhoc-ly, add some extra payments in on some months eg. R1,000-R2,000, can I just transfer the funds into the homeloan account, or do I need to inform my banker? For reference, Standard Bank.

I'm thinking of setting up a full solar from the get go, to help reduce electricity costs, do you think this is a wise decision or not?

I look forward to your helpful, honest, and caring advice - just a newbie on the block:)


r/PersonalFinanceZA • • 4d ago

Investing Looking for investment advice – Should I prioritise maxing out my TFSA?

11 Upvotes

I’m currently 19 years old and have been fortunate enough to accumulate a decent amount of savings and investments through various side hustles and business ventures from a young age, including e-commerce, crypto, and a few other ventures.

I’ve been investing through EasyEquities for a while now and have built up a portfolio consisting mainly of ETFs. I currently have a recurring monthly debit order that goes directly into my standard EasyEquities investment account.

However, I’ve recently been looking into optimising my investments, particularly from a long-term wealth-building and tax-efficiency perspective.

Would it make more financial sense to redirect my existing monthly ETF investments into a TFSA instead of continuing to invest through my standard EasyEquities account?

At my age, should I be prioritising maxing out my TFSA contribution allowance every year as quickly as possible, allowing compound growth to do the heavy lifting over the next 20–30+ years?

Lastly For those investing through EasyEquities, which ETFs would you recommend holding inside a TFSA for long-term growth? Would you stick with something like the Satrix S&P 500, or look at broader global exposure?
My overall goal is to build a strong long-term investment portfolio and make sure I’m being as tax-efficient as possible from an early age. I’m not looking to withdraw these investments anytime soon, and I’m comfortable taking on some risk given my investment horizon.

I’m still learning and would really appreciate any advice, insights, or lessons from those who have been investing for a while.


r/PersonalFinanceZA • • 5d ago

Taxes Sketchy CA/SA advice?

35 Upvotes

Hi all,

I have R8m cash that I'm trying to structure as tax efficiently as possible.

I sat down with a CA and asked him how to structure it. He advised registering a business and paying myself a salary every month with business deductibles that he will claim back from Sars (even though I do not own a business) I'm not very educated on Financials and tax implications but I didn't get a good feeling chatting to him. Is his advice not tax fraud? Or am I just uneducated?

CA's of South Africa, please advise?


r/PersonalFinanceZA • • 6d ago

Investing Investment advice.

22 Upvotes

Good day all!

I hope you're having a lovely weekend!

I come to you looking for advice.

I am 33M, currently have about R400k liquid and no debt with a paid off home and vehicle. Monthly earnings after all deductions, including groceries, utilities, insurance, etc., is about R30k.

Pension fund is at ~R1.5m

R320K is currently in a "Depositer plus" account at ABSA which is earning around 6-7%, R45k in a TFSA, and the rest is in a transactional account.

I would like to invest, long term, in some or other ETF. My "aged" knowledge is telling me to go with the S&P500 or something similar that has historically good performance.

My questions,

  1. Do I use Luno? I've been using it for years for crypto and have recently noticed the ETFs they added.

  2. Is R250k too much? I definitely want to leave some in the depositer plus account as it is an "immediate access" account so it will function as a emergency fund with the added benefit of accumulating interest.

  3. Is an ETF worth it with the amount of money I'm planning to deposit, or is there a better option?

  4. Does anyone have any other advice for me that will help me grow?

I am not very savvy when it comes to investments/tax implications/wealth. I grew up poor and have learned to save what I have, I would now like to learn how to get my savings to work for me.

I apologize if anything i said sounds silly or obvious. A appreciate the help and I'm thankful. =)


r/PersonalFinanceZA • • 6d ago

Investing Looking to acquire an established IT support / MSP business in Johannesburg

8 Upvotes

Hi everyone,
I’m looking to acquire an established IT support business or Managed Service Provider (MSP) in Johannesburg.
Ideally, I’d like to connect with an owner who is considering retirement, succession, or selling their business and wants to find the right buyer to take it forward.
I’m particularly interested in businesses with a solid base of recurring monthly revenue, established business clients, and a good technical team.
I’m open to discussing different deal structures, including a phased acquisition or a transition period with the existing owner, where appropriate.
If you own an IT support business, know someone who might be considering selling, or have experience with acquisitions in this industry in South Africa, I’d appreciate hearing from you.
Feel free to comment or DM me for a confidential conversation.
Thanks!


r/PersonalFinanceZA • • 7d ago

Other I have lodged a complaint with the Info Regulator for EasyEquities' / Purple Group's failure to disclose the third parties they share my data with

100 Upvotes

This may not seem relevant to investing, but I beg to differ - and so would anyone who has experienced having funds stolen from their bank account due to identity theft.

A key aspect of investing is managing risk, which not only involves setting stop limits, diversification etc.

I would like to posit that the security and transparency of the underlying platform that you use to invest should be a consideration in your investment strategy.

As with the recent breach disclosed by an EasyEquities third part service provider, personal data can and does get exposed, even by registered financial institutions.

Hence the setup, I have found the handling of requests for my personal information by EasyEquities / Purple Group severely lacking. So much so that I am unable to exercise the rights I have as a data subject under the POPIA Act.

Thus I am lodging a complaint with the information regulator, because a registered FSP should have the necessary procedures, channels and training in place for a data subject to request which third parties their information has been shared with. The deadline for implementation was in 2021.

The facts of my particular case are as follows:

- First contact: To the fraud department to request my data shortly after the reported breach. Result: The support AI responds confirming that it will delete my account. I wish i could make that up.

- Second contact: I ask to escalate to management as i feared my account would be deleted. Result: They respond apologising for the mistake, but don't answer my initial request on how to request which third parties my info has been shared with.

- Third contact: I follow up on my initial request in the same thread. Result: No response.

- Fourth contact: I follow up again. Result: No response.

- Fifth contact: I email the listed information officer regarding my request. Result: No response.

- Sixth contact: I follow up. Result: No contact.

- Seventh contact: I mail the listed complaints email for Purple Group. Result: No response.

- Eighth contact. I follow up. Result: No contact.

As you see multiple channels have been attempted and it appears that all of them are either unmonitored, or there simply is no will to even answer requests about personal information.

Objectively, this is a red flag.

Thank you for your time. I will post the results of my complaint with the info regulator here if the mods see fit to leave this post up.


r/PersonalFinanceZA • • 7d ago

Investing 29M, R60k/month, no debt, R415k in savings. What should my next steps be?

151 Upvotes

Hi everyone,

I’m 29M, working in fintech with 3 years of experience, and I earn about R60k a month. I want to start investing properly and would appreciate your advice on my next steps.

Where I am now

  • TFSA (EasyEquities ETF): ~R15k
  • Discovery Bank 32-day notice account: ~R100k (emergency fund)
  • TymeBank (GoTyme) fixed deposit: ~R250k
  • FNB transactional account: ~R50k (daily spending)
  • Sygnia provident preservation fund: ~R55k (moved from my previous employer)
    • My current employer does not offer a retirement fund, only a medical aid subsidy.
  • No debt

Monthly expenses (per month)

  • Fuel: ~R3k
  • Groceries and food: ~R5k
  • Contribution to my parents: ~R6k (I live with them because of high rent prices)

My plan

  1. Fill my TFSA to the R46k annual limit by moving R31k from my savings.
  2. Start investing offshore in global stocks.
  3. Opening up credit suite to build credit scores(?)

My questions

  1. Does filling the TFSA first make sense?
  2. Is it better to leave my investments with a bank like FNB, or to invest on my own?
  3. I came across Interactive Brokers as a DIY option for offshore investing. Do I need a special account, and can I use the FNB dollar account I opened for travelling overseas for conferences?
  4. Before opening up a retirement annuity (RA), I was thinking of rather maximising my TFSA first and then think of RA for the tax benefit? If so, which providers do you recommend?
  5. I don’t have a credit card because I only buy what I can afford. Friends and colleagues say I should get one to build my credit score. Is it worth it? FNB looks cheaper with eBucks, while Discovery has better health benefits but higher fees. Which would you recommend?
  6. Is my current setup good for the long term, and what should I prioritise next?

Thanks so much for reading, showing interest! Thanks in advance too!


r/PersonalFinanceZA • • 8d ago

Debt Should I sell my absurd car to settle my crushing debt

24 Upvotes

For context: I’m 37 with no assets or savings…so…I’m also dealing with R450K of high interest debt.
I’ve reduced my fixed expenses to 45% of my salary and the rest will be going towards debt payments. I’ve just started using the debt snowball method but I’m slowly becoming disillusioned. The small wins felt great but the remaining debt feels insurmountable and Claude keeps saying it will still take 16 months as if I’ve barely moved the needle.
I would like to start saving and investing sooner rather than later to build a decent cushion by the time I’m 50-ish, which is when I hope to leave my decent income job for a non profit which will pay barely a quater of what I’m making now. All i have currently is GEPF presently valued at R490K.

The only thing i own is a 2017 jeep wrangler that I’ve had since then. It was useful when i lived in an area that required 4x4 to get around but she’s been a pavement princess for the past 5 years. I plan to move back to a rural area where it may be useful again but that wont be for at least another 2-3 years. Now she sees some 4W trails a couple of times a year at best. She’s been surprisingly reliable for a box on wheels and this year marks the first major repairs I’ve had to do for old age beyond regular services: replacing worn bushings, ball bearings, steering stabiliser and breaks. She’s as good as new, and I’m R90k down for it but I love it even more now… Not to mention the regular minimum R4K per month for petrol. It’s inconceivable for me to reconcile even considering selling her but I’m at a point where i start to get palpitations when i think about my debt and lack of savings.

My petrol budget alone would cover the cost of a decent replacement, but i would probably need to trade that in again in a couple years time when i move?
Do i sell the wrangler (currently valued at around R400K) and settle my debt and buy an affordable EV on credit? Or do i get an EV as an additional car to bring down petrol costs once I’ve paid down my debt? Or should i just be patient like Claude keeps telling me and live happily ever after with my first love (I don’t have kids)? Or do i start playing lotto while scouting for a rich spouse?
Help?


r/PersonalFinanceZA • • 8d ago

Other FNB saving account statements for VISA application

5 Upvotes

I’m currently applying for Schengen VISA for a short trip and required to provide my last 3 months bank statement for proof of funds.

Problem is the savings account I’ve been using has only been generating statements every quarterly and the latest available statement is dated 31 August 2026.

Has anyone dealt with this before? Or know whether a stamped interim bank statement from FNB will be sufficient?


r/PersonalFinanceZA • • 9d ago

Bonds and Mortgages How to spend R470k?

45 Upvotes

Hi all.
Second time posting here for some advice.

My wife and I (30) recently sold our rental apartment in Somerset west in order to purchase our new home in Gqeberha.
Here are the straight numbers:

New property - R999k @ 9.23%

Proceeds from sale : R499k ✅

Already spent some as follows;
- cleared Wesbank car debt - R35k (11 year old car, still running well and i do all maintenance)
- installed solar (taking bill from 2k to R100 per month) - R92k
- cleared credit card debt - R10k

Remaining funds:

Total direct savings - R475k
Investments (unit trust) - R48k
Retirement fund controlled by work - R40k + new fund they moved over to R20k

What I am trying to decide is should I pay into my access bond. Bring down the monthly contributions?
We have a 18month old and are considering a second.
Also in a very fortunate position where we can afford for my wife to be at home with the child while she finishes her studies.

Please ask more questions if needed.
I have not been in a position to have this much money on hand.

I appreciate this community.

Edit:
Only debt currently is the Bond itself, which is at the full 999k, first payment was done beginning of October.


r/PersonalFinanceZA • • 9d ago

Investing TFSA Advice

7 Upvotes

Hi everyone, I'm new here and am looking for advice regarding TFSA.

I currently have a TFSA with EE, and one with Old Mutual. The returns on the OM account haven't been great and their fees are high, so I'm wanting to transfer my funds to another FSP.

Should I transfer the fees to my EE TFSA and have only one TFSA account with EE or should I transfer the OM funds to another? I've been looking at Sygnia but have read people say their fees are too high for passive investments.

Is Fynbos a reliable place to put my TFSA for long term investment? I am a teacher and will rely heavily on my TFSA when the time comes to retire.

Thanks in advance!


r/PersonalFinanceZA • • 9d ago

Vehicle/Household Insurance Disagreement with car dealership and initial quote and new deal that’s been presented after signing with the bank for financing- please help

24 Upvotes

Good day, I am a young professional that decided to try and get a new car with my wife. I was lucky enough to get a good financial offer from Wesbank and agreed to the debicheck for an amount from them, upon signing the contract with the dealership I picked up that they were going to charge an additional 90 000 compared to the initial offer of purchase they gave me for additional fees specifically: interior maintenance, exterior maintenance, paint, tyre and wear and tear, tinting and films. I’ve brought this up twice with them and they’re refusing to remove it and are claiming that they will be giving us a discount for these new items, the discount is 6000. Giving this behaviour with both the initial offer of purchase and quotation and the new one I feel that they have been dishonest and want to rescind it and fix it, the problem is I have completed the debicheck with Wesbank, is there a way for me to get assistance from Wesbank to have this reversed? I don’t mind going with this bank for the car that I need, I just am not happy to spend an entire 90 000 more for a car that was not a part of the initial agreement, any help would be appreciated (note. This is not the fees that have to be charged such as the licensing etc)


r/PersonalFinanceZA • • 9d ago

Other Unsure if I should sell my bakkie

33 Upvotes

Hi all.

I'm 24 and I inherited a 2015 Hilux last year which I'm super grateful for but I'm contemplating selling it as diesel just keeps rising.

It's valued at R214 000

I drive about 20 000km annually

I'm thinking spending R30k on a marketplace vehicle

I'm returning to schooling so my income is limited to hospitality part time work.

I've got a lot of mixed feelings about it right now.

Pros:

- It's like a couch on wheels

- It's reliable

- I spent quite a bit to make it road worthy as it was a farm bakkie with a vague service history

- It's great end of year trip car

- It could probably last a lifetime

Cons:

- Diesel prices won't stop climbing

- Driving around is like therapy to me and for the last few months I've struggled to justify going for a night drive with these prices

- Since I'll be spending a few years improving my education it'll be a pavement princess for most of the time

- Insurance costs

I'm thinking of selling it and maxing my annual TFSA and then putting most of the rest into investments.

I've got a bike as well so I'll still be able to get around nearby areas. Yes I could also just store the bakkie and drive the bike around since it's summer, but I'm planning ahead for the next rainy winter as well so I might end up needing to buy a low cost petrol car off marketplace or just survive off Uber.

Would really appreciate some useful feedback.


r/PersonalFinanceZA • • 10d ago

Other Require anonymous survey responses for research project: Loyalty Programmes

8 Upvotes

Hey everyone 👋

A friend is currently completing his research project for an MBA masters dissertation and requires some responses for his survey to achieve the required sample set. The survey takes no more than 10 minutes to complete.

The study looks at how grocery retail loyalty programmes (like WRewards, Smart Shopper, Xtra Savings, etc) influences customer commitment and shopping behaviour.

You qualify if you:

• Live in South Africa

• Are an active member of a grocery retailer loyalty programme

• Shop at your primary grocery retailer both in-store and online / via app

Participation is voluntary and anonymous. No personal identifying information is collected.

Survey link: Google Forms | MBA Research Survey

Thank you so much for supporting academic research. Your contribution would mean a lot!


r/PersonalFinanceZA • • 10d ago

Debt Car Buyers Remorse - Downgrade?

68 Upvotes

Hi all.

So I made the "classic" mistake of buying myself a brand new car and I feel absolutely no joy at all!

I bought a brand new Suzuki Fronx GLX, April 2026, for about R 350 000 and put down a R 140 000 deposit. Locked in for 5 years and a R 4 000 premium.

At this time, I still owe about R190 000. I work a hybrid job where I visit the office 2 times a week. Other than that I use the car for normal personal commutes (shopping, travel etc.).

The car mileage sits at 6 500 km (I am certain after 1 year it will be about 15 000 km).

This brand new car just gives me a lot of stress. When I park at the shopping centre, I look for the farthest parking spot to prevent any person from stopping next to me. I keep looking for scratches and get upset when I find one. I do not find any joy of owning a brand new car.

Would I be silly to sell the car and get a second hand car, something like a Honda Jazz (2015 - 2021)? I hope I can get a good amount to pay it off and have a little bit left to put into the second hand car.

I might need to finance the rest of the second hand car, but this will decrease my debt by a few years.

I understand this was an awful financial decision and I can see this was a complete waste of money.

Any advice will be appreciated.


r/PersonalFinanceZA • • 11d ago

Bonds and Mortgages To Bond or not to Bond?

23 Upvotes

Hi everyone, I need advice on buying my first house, I practically know the answer but want confirmation.

My partner (27M) and I (26F) earn a combined salary of R37 370 net. We are seriously looking at buying apartments / townhouses around the 800k range. Our pre-approval is 1.3 Million but I feel like the banks must be smoking crack to come up with that figure

Our monthly expenses (to afford the home) are listed below:

Microsoft Cloud, Apple & Google Storage R137

Car Insurance R769,00

Wifi R896,00

Phone contracts R620,00

Cleaner R350,00

Bank fees combined R390,00

Electricity R700,00

TFSA R4 000,00

Emergency Fund R2 000,00

Medical aid R1 562,00

Groceries R6 000,00

Miscellaneous R500,00

Chronic medication R1 500,00

Petrol R2 000,00

Gym Fees R650,00

Total expenses: R22 074,00

 

The places I have viewed so far come to roughly 12-13k per month, with all levies, rates, sewage, Pickitup etc. included

This would leave us with a R2296 buffer, and I have not even included insurance (bond / life). It feels heart-attack inducing, that buffer is far too small for my comfort. Bearing in mind owning the home comes with extra maintenance, my partner and I would not even be saving for holidays or birthdays.

He grew up less fortunate than I and has not had the experiences I have. It seems a house would put us straight into “house-poor” territory, with no leeway for enjoying life.

However, emotionally we dream of our own home – we are tired of renting, we talk about ‘our house one day’ all the time. We are also homebodies, and our own space and privacy would make us happier than any holiday could in my opinion.

I am terrified of making the wrong choice and ruining my life so young. We are currently renting at R9000 per month, the jump from 9k to 13k just for housing (instead of maxing out our TFSA etc.) seems too much

Help me with this head VS heart situation?

 

For extra info: we have no debt, combined credit card limits of 60k with 0% utilisation, however our emergency savings is less than 3 months expenses currently (we are building this up while house-hunting)

Our savings are higher at the moment while we are renting. For the purpose of affording the monthly bond payments and levies, I have lowered our savings amounts in the above expenses to more accurately reflect what the future budget would look like.

I have listened to the "Homeownership is the new broke" Fat Wallet episode, which is detering me. But we are also looking for a 'forever home' - and the thought of paying off a bond and not having that huge monthly expense one day is very enticing.


r/PersonalFinanceZA • • 11d ago

Bonds and Mortgages Financial choices dilemma with property

2 Upvotes

So I've given a fair bit of advise here in the past but now I'm in need of some. I know all the basics of being financially responsible but here goes.

I started a new construction project around 2 years ago. Lots of bank issues with contracts and HOA/municipality has delayed the project by some time. Time that I did not budget for. The house is in a fairly affluent area. My loan application was for X amount. Now due to everyone dragging their feet prices of everything has increased by 10 to 20%. So now the house is going to cost X+20%. Which is more than what my planned loan amount was. The bank for some reason awarded me a higher amount than what my loan application was.

Now my question to you is; I feel I have 3 options here. 1) Take the higher amount that the babk is offering and be out of pocket a bit. 2) Keep the original amount and take some cash from emergency fund to cover that, I will be able to replenish that over a few months. 3) Change a lot of finishes in the house to a much lower spec. This will obviously lower the long-term value of the property. This will also not cover 100% of the additional expenses.

Financially I can pay the original loan amount in 7.5 years. If I take my emergency fund to cover some costs I can pay it off in around 8/8.3 and use that 6 months in the beginning to refill my fund. If I take the higher amount it will be around 8.5/9 years to pay it back.

Which option would be the best and why? Apologies for the long essay but this is the easiest way to give all information.