Saving to secure our future

By Andrea Naicker

The exorbitant cost of living makes it challenging for many South Africans to make ends meet. This influences the choices they make today and impacts on saving for the future. 

The lack of saving in our nation can be attributed to underlying economic issues, such as unemployment, which may hinder people from saving as they struggle to meet their financial commitments.

As we evaluate our financial obligations, we can also consider how we can save some finances, irrespective of how little the amount may be, to pave the way for our future.

If every South African saves and practices healthy financial habits, we can create a thriving South African economy. When we save money it contributes to increased levels of investment and boosts our national economy.

Our economy has proven resilient, as recent statistics reveal that our average inflation rate for 2023 was 6,0 percent, lower than 2022’s 6,9 percent. Furthermore, our lowest inflation rate was 4,7 percent, recorded in July last year which is the lowest it has been since July 2021, when the rate was 4,6 percent. 

It came at  an opportune time as we observed national savings month in July last year, a period in which South Africans were encouraged to take stock of their finances and save wherever possible.

During national savings month, the South African Savings Institute (SASI) conducts an annual savings campaign for the purpose of creating awareness and healthy debate around saving.

This initiative emboldens all South Africans to take action and save, including children and youth. SASI’s programmes take the message of saving to South African children, from grades 4-7, and youth in TVET colleges.

By equipping our children with financial knowledge, they will be prepared to enter the labour force, manage income and save for their retirement.

South Africans can prepare for their retirement through investing in reputable retirement annuity funds and can also consider investing through the RSA retail savings bond to secure their finances and future.

The RSA retail savings bond is an investment with government which helps South Africans gain secure, market-related returns on their investment.

Through the RSA retail savings bond South Africans can earn fixed, inflation linked or variable interest according to the investment chosen. Individuals can choose from a fixed rate RSA retail savings bond, inflation linked RSA retail savings bond or a RSA Retail Savings Top-up Bond.  

The public can easily access and invest in these saving bonds which are open to any South African with a valid identity number and bank account, with any financial institution in the country.

We call upon South Africans to invest wisely and compare investment opportunities, including bank accounts, unit trusts and reputable community savings clubs, to yield the best returns on investments.

South Africans can also explore a side hustle to gain additional income that can be further invested. We can also save by creating a budget and sticking to it.

Individuals can make use of the 50, 30, 20 budgeting rule, advocated by the United Nations Federal Credit Union, which advises allocating 50 percent of income on needs, 30 percent on wants and 20 percent towards savings.

Budgeting allows us to examine areas of excessive spending, which in many households can be take-outs, electricity and fuel. We can save funds by preparing home-made meals, monitoring electricity consumption and using public transport. Price comparisons and buying only the items required also enables consumers to save.

Another way we can save is by eliminating debt and loan repayments. South Africans are encouraged to pay off their debt and seek the guidance of legitimate debt counsellors and financial advisors.

Let us all play our part by being financially responsible and adopting a culture of saving to create a financially secure future and a flourishing economy.