July is Savings Month.
Almost every personal finance article I come across, gives people tips on how to save and invest. But before I get into that – let me set the record straight.
Any savings tips or information that I give, is for those who can afford to save, for I am well aware that there are many South Africans who truly just can’t save money right now.
With load shedding, job losses, rising inflation rates and the increase in interest rates, debt repayments and cost of living – people are struggling to survive, much less save.
Research shows that 76% of South Africans regularly run out of money before the end of the month, and more than half run out by the middle of the month.
The reality of the situation is that many South Africans have to choose between using their last R20 for bread or electricity.
The struggle is real – and I acknowledge that. I certainly don’t want to be adding to anyone’s mental stress, by making them feel inadequate because of their inability to save money which they don’t have.
However, I have to make a point of saying that the concept of saving shouldn’t only be seen as the literal saving of money in envelopes, under the mattress or in a bank account.
Saving money can also come from knowing how to spend your money wisely, and changing your lifestyle habits, which bring about savings as well.
Yet, I must encourage you to please try saving even the smallest amount on a regular basis. Having some money saved when an emergency hits, is never a bad thing.
Wikus Olivier, managing director at CreditSmart Financial Services, recently gave his input on Savings Month.
“Hats off to the consumers dealing with our current reality as best as they can,” he says.
“Considering the overall picture, National Savings Month, observed in July, should take on a more encouraging tone as organisations need to emphasise the crucial need for consumers to know they are not alone in their situations.
“We should motivate and guide South Africans how to reassess their budgets so that they can identify cost-cutting areas and strive to save even if it means starting with as little as R20. It is vital for individuals to take proactive steps and try to prioritise savings in whichever form, even while facing trying times,” he adds.
Olivier has these tips for consumers to push through tough financial times while getting into the habit of becoming resilient and savvy savers:
You will not “financially win” if you do not have a budget. List your income and expenditure and subtract your expenses from your income.
Track your transactions and identify areas of over-spending each month. If you do not grasp your full financial picture, you will not realise when your hard-earned money is being wasted.
Having a budget in place is vital and ensures that you plan for your expenses.
Remember also to eliminate non-essential costs, such as takeaway meals or buying designer outfits.
Why not try a no-luxury or no-impulsive spending freeze for the month and say no to anything that is not a necessity and see how much you save.
Even while dealing with the annoying L-word (load shedding), continue to play your part and manage your electricity expenses.
Keep tabs on your actual meter readings and do not rely on given estimates.
Why not give the self-service online meter management system a try and make sure you do not pay more than you should. If you are a prepaid customer, buy enough electricity units per single calendar month, preferably at the beginning of each month.
Review subscriptions, memberships and policies. Cancel subscriptions and memberships you can live without or do not use.
You can also consider other alternatives or share costs with family and friends and do not forget to review your insurance policies each year to see where you can save a bit extra.
I agree with all the tips Mr. Olivier has given, however, I would like to make some suggestions to those who are not in the position to implement these particular tips.
I am talking about the unemployed people, those living on social grants, those who have lost their jobs due to load shedding, those struggling to just survive.
I want you to take the time and make the effort to discuss the issues of job creation, housing, load shedding and education with your local ward councillors and all other politicians who will be making their way into our communities in the run-up to next year’s election.
They will undoubtedly be coming with lofty promises for the years to come. First make sure that you hold them to account for the promises of employment, and better standard of living which hasn’t materialised from the last time.
Believe me, it is far easier to save money when you have a job, a roof over your head, electricity in your home and food in your belly.
dailyvoice@inl.co.za