SAVING & INVESTMENT
Financial Literacy
for nly O ot N is ing v Sa
l u ccessf u S Rich or ple o e P siness u B
I
n the latest South African Reserve Bank (SARB) Quarterly Bulletin, the second quarter household net savings stuck for the fourth consecutive quarter on 0% of disposable income. The SARB Quarterly Bulletin report reveals a damning picture of South Africa’s extremely poor level of household savings. Marketing and Communications Manager of Sanlam Sky Solutions, Tendani Matshisevhe, says many people believe only rich people can save but this is not true. If you don’t start saving now, you could find yourself in big financial trouble years from now, he warned. However, Matshisevhe says a considerable number of the South Africans are faced with many obstacles to saving. Food prices are rising, fuel prices are high and electricity is expensive; all of these factors are pushing up the cost of living and decreasing what we have left to save. But he says while these expenses are very real, there’s no excuse not to save for a rainy day. “You must start saving now and the younger you are the better. Saving should become a part of your daily 22
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aside now because you never know when you might need it. You might need a deposit for a house or you might need it if you become ill.” Matshisevhe has a stern warning for both youngsters and pensioners alike. For the youth, he warns them against spending their companies’ pensions when they change jobs. “Many youngsters change jobs these days. So you work for three years for a company and belong to its pension scheme but when you change jobs, you ruthlessly spend the pension on short sighted things. If you do that, then you’ve lost three years worth of saving.” He advises that you should rather keep that money saved in a saving or retirement product. At the same time he warns pensioners not to rely on their children to take care of them. “Times are changing and we need to change the way we think. Children are moving out and not living with their parents anymore. So parents must stop seeing their children as an investment.”
Matshisevhe also warns against using credit cards because this can get you into big debt. As South Africans we spend on average 40% of our salaries paying off our debts. “We live off credit cards and then stay forever indebted to credit lenders.” He says South Africans particularly get into debts over the activities and you should be disciplined.” festive season. “People spend a lot of He says you can find one or two luxury money over the festive season and this items that you can spend less on. “For is short sighted. Rather put some money example we buy on average R300 worth away so that when January comes you of airtime every month. Maybe we can still have money for your basic bills, like look to buy less airtime or perhaps don’t school fees.” buy alcohol for a weekend. Or maybe don’t go home every month (for those As one of the country’s leading financial that work far away from home) but go institutions, Sanlam is intimately home once every three months. In hard involved in providing South Africans with times like these, you must be clever solutions to meet their short, medium about saving”, Matshisevhe urged. and long term saving and assurance needs. It’s also a major player in the He says if you earn around R3 500 a reform of the retirement industry in month, you could try to save around association with other leading financial R300 and for people earning less, he service companies and the national recommends that they put away at least treasury. Sanlam’s own initiatives R200 a month. “Then try and put this include working in conjunction with the into a bank account or saving product Operation Hope organisation to teach and leave the money there. You will then high school learners about the basics of start earning the interest.” banking, credit, budgeting, investment and entrepreneurship. He says everyone should speak to a financial expert who would then do South Africa’s saving rate is woefully a ‘financial needs analysis’ to assess short when compared to countries your specific needs. “This will help you like China and India and as a result determine your short-term and longthe country needs to be pushed up to term saving goals. Short-term goals may underpin the ongoing economic growth be saving towards a wedding or a car. and development. The South African Long-term goals would look at saving Savings Institute, the Teach Children for the day you retire.” He says it’s very to Save campaign and a wide range important to have money saved for an of financial institutions are helping to unforeseen event or crisis. “Put money improve the national saving outlook.
