Johannesburg – Saving should not be seen as a once-off exercise.
According to Ester Ochse, product specialist at FNB, consumers should re-evaluate their lifestyle and make saving part of it.
Ochse shares a few habits consumers can adopt to achieve this.
Among these include buying what you need. “Determine what you need and what you don’t need. Sometimes we become ‘impulse buyers’ and tend to waste our money on unnecessary clothes, cosmetics, toiletries,” she says.
Cooking at home is also a more cost effective option than buying take-outs daily, explains Ochse. “You will be surprised at how much you can save by just cooking a healthy meal for your family. An added bonus is that you can take leftovers for lunch the next day.”
Save spare change in an account, suggests Ochse. Instead of putting your loose coins or notes under the bed or couch, open a savings account.
Another option is to have coffee at home or at the office. The cost of going to the coffee shop adds up over time, she says.
Consumers can also skill themselves in DIY. One can find DIY solutions on the internet. “If the problem is big, call in an expert - if not, then just DIY,” says Ochse.
It is also best if consumers try to pay off debt quickly. Debt can lead to high interest rates, she explains. “Money used in interest is money given away, so be responsible and take out only ‘good debt’ and ensure that you pay it off as soon as possible."
Finally, creating a minimalist, clutter-free lifestyle could help save money, says Ochse. "Live simply and be content with what you have."
However, there are reasons that may make it difficult to make these saving habits part of your lifestyle.
Glen Jordan, director of IMB Financial Services, explains that this has to do with a lack of trust, debit orders, debt repayments and lack of access to financial services.
South Africa’s unbanked or underbanked citizens are reluctant to trust faceless institutions with their money, having often been victims of crime or fraud in the past, explains Jordan. "Ironically, this lack of trust leads them to hold on to cash which is vulnerable to theft or loss.”
Jordan suggests that a human interface, by means of a network of service centres owned and operated by members of the community where they operate, could help instil trust.
If you fear your funds will be depleted through debit orders, you can take control of your payments with an account protected from debit orders. "This gives customers back control of their finances, allowing them to manage their cash flow on their own terms," says Jordan.
Data from the Payments Association of South Africa shows that about 31 million debit orders are processed nationally each month - 1.2 million of which go unpaid.
You can also try to reduce your debt repayments by renegotiating payment terms with creditors so you have financial stability while repaying your debt, explains Jordan.
In South Africa, more than half of consumers are at least three months in arrears on their accounts and there has been a 120% growth in indebted consumers since 2013. About 75% of South Africans spend three-quarters of their income on debt repayment.
Another factor eating away at savings has to do with lack of access to financial services. According to a survey by technology research body FinMark, the unbanked and underbanked still make up a large portion of rural and disadvantaged communities.
This large group is trapped in poverty, without access to financial services, restricted to cash and unable to store money safely, he explained.
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