SA needs to change savings mindset - body

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Cape Town - South Africans urgently need to change their mindset and attitude towards saving, as many consumers simply do not know how to save, says the South African Savings Institute (Sasi).

The remedy for this is to find a simple, realistic goal to save for, suggests Sasi CEO Elizabeth Lwanga-Nanziri.

“Saving becomes much easier once there is something to save towards, whether it is a long-term or short-term goal,” said Lwanga-Nanziri.

Especially worrying is the fact that young people are also being sucked into a culture of consumerism and instant gratification, with experts warning that debt is increasing rapidly among the youth.

“We find young working South Africans who spend their whole salary -  without saving a cent - because they think that 10 to 15 years is too far off in the future to plan for,” said Lwanga-Nanziri.

Consumer debt is crushing South Africans' hopes of building a savings culture, with 80% of disposable income going towards debt.

Savings levels are creeping up - but slowly, said Lwanga-Nanziri: "Even though the level of savings has increased slightly, it is still alarming that nearly 80% of people's disposable income goes towards their debt."

With the dramatic rise in the cost of living and increasing levels of unsecured lending and household debt, it may be a reasonable argument that people just do not have money to save.

But not saving means they simply face an even scarier financial future, said Lwanga-Nanziri.

 - Fin24

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