'Make up your mind to save, SA'

Johannesburg - South Africans had to make choices as a nation as they could not live in debt and not save for tomorrow, Old Mutual said on Monday.

This followed the launch of National Savings Month by the SA Savings Institute.

"We need to use the momentum around the launch of National Savings Month [July] to inspire South Africans to save and build up their own wealth through consistent and disciplined financial behaviour," said Crispin Sonn, director of corporate affairs at Old Mutual.

"Over-indebtedness, insufficient retirement savings and poor financial education should jolt South Africans into action if the country is to fund its investment and growth," he said.

Sonn said statistics told a sobering story.

About 2 000 houses and 6 000 cars were being repossessed monthly.

The average percentage of debt to income peaked at 79.2% and there were about 80 000 judgments for debt per month.

According to Sonn, poor financial habits were at the root of poor money management.

"Hence, the emphasis should be on changing behavioural patterns by assisting consumers to start new habits and breaking old ones - especially in an environment where more people are considerably better off today than they were five years ago."

He added that skills and capacity building were important with financial literacy a priority.

"In order to do business successfully in South Africa, we require a healthy and conducive economy - which in turn is reliant on a financially astute society.

"Saving is important for economic growth but growth is also important for saving," Sonn said.

It was therefore imperative that policy responses did not only focus on savings but on other drivers of growth as well.

Sonn said there should be a concerted and collaborative effort by business, government, labour and other interested stakeholders to mobilise and grow the nation's savings.

"Increasingly South Africans are introduced to the realities of spending, saving and finance at a younger age.

"Yet we do not have a well-coordinated and coherent financial education programme to help consumers manage their finances better."

He added that many young people took jobs with salaries far higher than what their parents earned.

"They then begin to live a lifestyle they believe fits that income.

"Many realise too late that what the previous generation have is the result of assets accumulated over many years," he said.

- Sapa