SAVE FOR A RAINY DAY

JULY is savings month, but these days many South Africans are struggling to pay their bills, buy the necessities, service their debt and just survive. 

So, to actually have a separate account with actual savings in it is really a luxury. 

To save money, I would ask people to change their habits. Start with the small, simple things – like comparing food prices, watching bank charges, managing electricity spend – and save money that way, rather than actually putting money into a bank account.

Everyone is sukkeling in some way or another. Our income and salaries have not kept up with the rising cost of living. 

Don’t feel guilt or shame about a bad financial situation. Put that energy into finding a solution. 

That differs for everyone. It could mean talking to your creditors, going under debt review, getting back to basics by creating a budget on paper, or simply sitting down with your family to discuss reining in spending, tightening your belts, and prioritising your mental health as you navigate your financial challenges.

So how are we supposed to be saving, when we are struggling and stressing just to survive?

Sarfaraaz Hamza, CEO of ezDebt, advises South Africans to try and save, even the smallest amount. “South Africans should be looking at their overall financial well-being. This includes being able to comfortably manage their monthly debt instalments (while striving to become debt free) as well as having the safety net of some savings as well as a financial plan for their retirement years,” Hamza said.  

Hamza acknowledged the struggle of South African consumers, and went on to give some valuable tips which could lead to more household savings:

• Follow a budget

There are still too many people who don’t have a household budget. You have to start somewhere. Every month, add up all your income (after tax) then subtract how much you spend.  There are many apps (including banking apps) that can be used for budgeting or you could simply go old school  - write down all your income and expense. The key is to be honest, and set a realistic budget you can stick to.

• Draw out a set amount of cash each week

Swiping cards and contactless spending make it easy to overspend because no physical money is exchanging hands. One way to better manage your spending   is to draw a set amount of cash for the week and try not to use your cards unnecessarily. 

• Hold back on the take-outs at home, and every day coffee and lunch month spent at work.

It may be hard to get out of the habit of getting take-outs, but do yourself a favour and add up how much it is costing your every month. The same with buying coffee and lunch at work everyday. 

• Go back to basics and start comparing prices – but be clever and practical about it.

Many businesses use social media platforms like Facebook, Tik Tok and WhatsApp to advertise their weekly specials. Make the effort to compare prices – but also check to see how far physically far apart these specials are from each other. It doesn't make sense to save R10 on a packet of washing powder, only to drive out R100 worth of petrol to get it. Make sure that any savings you are getting is overall worth your while.

• Manage your electricity spend

With the increase in electricity tariffs, we need to make a concerted effort to check our electricity usage and spend and manage this accordingly. There should be no shame in switching off lights, geysers and appliances. Every household has to find what works for them.

• Take advantage of loyalty programmes

Loyalty programmes are not free, they are actually a reward for your commitment to a particular brand. And like the saying goes – never look a gift horse in the mouth. Use the discounts and specials  being offered to you. You’ve earned it.

• Stop shopping/spending to make yourself feel better 

Shopping (spending) can give us short-term high and provides an escape from depression or anxiety. We feel good for a little while, and it may even bring us a much-needed smile  - but it can have debilitating consequences on our finances. If you're feeling like your shopping habits are out of control, talk to a friend, find another activity that makes you feel good, or seek help from a doctor or therapist.

• Watch your banking charges

Make the concerted effort to check your bank charges. Do you need to be spending a few hundred rands more per month, so that you have a specific colour card that has features that you don’t even use? If you don’t ever travel – why pay for better “our of country” promotions, or even for access to travel lounges on a more expensive banking package?

• Be clever with your debt.

Don’t be in denial about your debt. Pay your most expensive debt (that with the highest interest rates) first.

Hamza added: “ Cutting back on spending in one part of your life, only to  spend unnecessarily in another part makes no sense. The idea is to take the money you are saving by spending less – and set it aside (whether in a money box, a cooldrink bottle  or a bank account) for when you  need it. We need to shift our mindset from “saving is a luxury” to “saving is a need”.