The South African Savings Institute has designated the month of July – Savings Month. The non-profit organisation dedicates itself to developing a strong savings culture within South Africa. However, according to current data, the savings culture for South African households is pretty poor in general.
Savings Culture In South Africa
BusinessLive reports that at the end of 2019, the savings ratio for South Africa was -0.20%. A negative savings rate is difficult to comprehend. This means that as a country, consumers spent more money than was earned and there were no savings at all. These stats were published by the South African Reserve Bank.
South Africans also use debt to cope with extreme financial pressures, which is reflected in the continued rise in credit card advances and the fact that we spent 72.8% of our gross income in 2019 to service debt, according to the central bank.
Many South Africans are stuck in what is known as a debt cycle. This is when credit cards, overdrafts or payday loans are used in the weeks and days before the next pay day just to make it through the month.
High levels of indebtedness can be directly linked to low levels of financial literacy. Financial literacy is your ability to make rational decisions when it comes to spending, saving, borrowing and investing.
A common issue when it comes to borrowing money is not understanding the cost of credit. When desperation kicks in, interest rates and fees are often not taken into account before applying for and taking new loans. Constantly using debt for household living expenses is an expensive habit.
Here Are Some Easy Saving Tips
- Pay yourself first – easier said than done, but saving as soon as your salary comes in will help you refuse the temptation to spend what is left.
- Draw up a proper budget – do this properly and do it every month. You need to track how you spent against your planned budget to find out where you overspent and manage those areas going forward.
- Review expensive policies and subscriptions – try get a cheaper vehicle insurance or cancel those movie subscriptions or apps you never use.
- Plan grocery store visits – don’t go to the store too often. Make a list of meals and ingredients needed and only buy what is on the list. Try buy in bulk or no name brands where possible.
- Avoid those luxuries – although we all need a treat every now and then, try limit unnecessary expenses.
Debt Repayments Eating Up Your Whole Salary?
If most of your salary is being taken up by debt repayments, you could be over-indebted. Consumers can possibly reduce monthly debt repayments by speaking to a debt counsellor. Debt counselling can assist over-indebted consumers by reducing monthly debt repayments and interest rates.
Monthly debt repayments can be reduced by as much as 70%. By freeing up this much needed cash in your budget, you should be able to afford all of your living expenses while keeping up with debt repayments. Debt counselling is a formal process which is endorsed by the National Credit Regulator.
Vantage Debt Management believes in empowering South Africans to imagine and achieve a better tomorrow. Our honest, transparent and educational approach to financial difficulties has earned us a great reputation in the industry. Give us a call today or fill out or free callback form to get instant help and advice.