Latest news with #NationalSavingsMonth
The Citizen
4 days ago
- Business
- The Citizen
Survey shows how economic distress erodes South Africans' savings culture
Consumers find it difficult to stick to a savings culture while the economy causes so much financial distress. Concerning insights from the latest Debt Rescue consumer savings survey highlight a severe disconnect between South Africans' desire to save and their inability to. This is in no small part due to South Africa's struggling economy and its impact on consumers, painting a grim picture of a nation living from month to month and on the brink of financial ruin. Neil Roets, CEO of Debt Rescue, says with the majority of consumers now barely even able to live from pay cheque to pay cheque and many relying on freelance or seasonal work, savings are becoming a luxury most South Africans can no longer afford. He emphasises that they need urgent, practical financial support to help households build financial resilience in an increasingly unaffordable economic climate. 'At least two-thirds of our respondents say that despite prioritising saving every month, they are finding it close to impossible to do so now, due to financial hardship and challenges resulting from the country's economic downturn.' ALSO READ: Ordinary South Africans will feel impact of US tariffs Survey shows consumers are trying to continue savings culture Key insights from the survey, which coincides with National Savings Month in July, show that South Africans are desperately trying to secure their future finances and shield their families from even greater economic duress, but are failing miserably due to immediate basic needs barely being met. A total of 48% of respondents report that they cannot cover basic essentials like food, energy, housing and healthcare, while another 41% say they only just manage their essential day-to-day living costs. Roets points out that there is clearly no lack of will on the part of consumers. 'While it is encouraging that 87% of respondents are actively trying to improve their saving habits, the resolve to save is simply not enough in the face of serious financial strain.' He says the unsustainably high cost of living is the primary barrier, with nearly half of those polled (47%) citing the high cost of living as their main barrier to saving, while 27% attribute unexpected expenses such as medical bills as the primary reason they fail. ALSO READ: Latest petrol price increase puts SA consumers on backfoot again This is how savings culture is failing in SA Some of the stand-out insights from the survey are: 35% of respondents prioritise building an emergency fund as their most important savings goal, highlighting how many are conscious of the reality that they might be living one crisis away from financial collapse. Almost a third (27%) do not save any of their income, while 29% save less than 5%. Only 18% manage to save more than 10% of their income monthly. Saving behaviours are worsening: 26% of people polled say they save less now than they did a year ago, while 23% say they stopped saving altogether. Only 20% managed to increase their savings. ALSO READ: Are you a young professional? Here's how to avoid the debt trap Beware: hope is not a strategy – avoid online gambling to save your financial problems On the back of the financial travails that plague millions of South African households, a mammoth new social ill has reared its ugly head and is far bigger than most people realise, Roets says. Online gambling increased by 550% in only four years with no sign of a reprieve, reaching a turnover of R1.14-trillion in the 2023/24 year, or nearly 17% of GDP. The best available research shows that it is mainly low-income South Africans who gamble away an astonishing share of their monthly pay, out of sheer desperation, undoubtedly hoping for big winnings that will somehow transform their circumstances. 'Meanwhile, the national consumer debt crisis is deepening with the latest figures showing that the debt to disposable income ratio for South African households has increased to a current level of around 75%, which is higher than the long-term average of 70% according to the South African Reserve Bank (Sarb). 'What all of this points to is that, while South Africans want to save, they simply do not have the means to do so and are relying more and more on credit, the state and/or turning to risky behaviours like gambling to manage everyday living costs. 'Consumers have already started to downgrade their lifestyle costs or cut them out completely, and this is very concerning in areas such as insurance, which places them in a vulnerable situation.'
The Citizen
6 days ago
- Business
- The Citizen
How can you save when you use 75% of your income to pay debts?
You would excuse South African consumers for being cynical about saving given that their money runs out before the month does. Most consumers are cynical about National Savings Month in July, asking how they can even begin to think about saving when they spend 75% of their income to repay debts which are usually the result of borrowing just to survive. According to the 2025 1Life Generational Debt Survey, only 41% of employed South Africans manage to save each month and even those who do are often not saving nearly enough to build financial security. A further 36% say they simply do not earn enough to save at all. The situation is just as concerning among middle- to higher-income earners, as DebtBusters reports that individuals earning R5 000 or less are using 75% of their income to service debt. People earning R35 000 or more are not much better off, spending 74% of their income on debt repayments. 'Too many South Africans are overwhelmed by debt and living paycheque to paycheque, but no matter your income level, there are real, practical steps you can take to regain control, build healthier money habits and start working towards long-term financial stability,' Hayley Parry, money coach and facilitator at 1Life's Truth About Money, says. ALSO READ: Savings month: How to save like a millionaire – even if you are not one yet Stop telling consumers they must save and show them how to Tando Ngibe, senior manager at Budget Insurance, says we must move beyond simply telling people to save and start showing them how. 'Budgeting does not have to be complicated. Even small changes can create breathing room and protect you from the financial shocks that so often derail progress. It is about building a new culture of money awareness and resilience.' Insights from the 2025 1Life Generational Debt Survey paint a sobering picture of the nation's financial health: 22% of respondents admit that past financial decisions have left them in debt 34% are carrying inherited debt passed on by previous generations 53% still believe they can build generational wealth, even with a modest income. Separate research from Trading Economics highlights just how strained household budgets are. South Africa's household savings rate dropped to -1.2% in the fourth quarter of 2024 from -1.0% in the third quarter, according to Trading Economics. Parry and Ngibe agree that while the data is sobering, it is not the end of the story. ALSO READ: Savings month: Here's how to build your financial future brick by brick Stop judging consumers for not saving and equip them to Parry says they are not there to judge, but to equip. 'Financial freedom starts with knowledge and consistent action. Even if your starting point is deep in debt, there is always a way forward and platforms like 1Life's Truth About Money, which offers free courses tailored to different life stages, are designed to help South Africans take that first step. 'The choices we make today do not just affect our own futures; they have the power to break cycles of inherited debt and create lasting financial security for the next generation.' Ngibe echoes this sentiment, saying it is time to demystify money. 'Savings Month is not just about setting aside cash but about shifting mindsets, breaking generational cycles and making sure every rand works as hard as you do. With the right tools, support and commitment, financial resilience is possible.' They say this National Savings Month, the message is clear: it is never too early or too late to take back control of your money, and you do not have to do it alone.
eNCA
13-07-2025
- Business
- eNCA
Saving can help companies prosper
JOHANNESBURG - July is National Savings Month and a time to reflect on our money habits. This is especially important for small businesses, many of which fail because of poor financial reserves. SMEs in South Africa are particularly vulnerable to the hardships the economy faces. Brent Downard, Head of Credit Risk at Merchant Capital, says businesses should stop viewing savings as a luxury.
TimesLIVE
11-07-2025
- Business
- TimesLIVE
Five ways to improve saving strategies
As July is national savings month, RCS chief risk officer Myles Coelho has shared savings strategies to help South Africans build their financial resilience to cope with unexpected financial challenges in the future. Consumer confidence dropped to its lowest in two years in the first quarter of 2025, from -6 to -20 index points, fuelling concern about making ends meet due to the high cost of living. Coelho urged consumers to turn the economic uncertainty into an opportunity to build clear savings plans. 'Every South African should be taking a moment to assess whether their approach to savings is working and, if it isn't, how it could be improved for their own benefit,' he said. Here are five simple savings strategies: Budget with intent and flexibility This means changing small habits such as making coffee at home or cooking meals at home instead of buying. To achieve this, Coelho suggests doing a daily and weekly audit of your spending to identify 'leakage'. 'Those small, often unnoticed expenses that add up. Could you pack a lunch rather than purchasing one? Even cutting out one unnecessary purchase a week — perhaps a cold drink or a snack — and redirecting that money into a dedicated savings jar or a low-fee savings account can create a tangible starting point.' Make savings non-negotiable Coelho recommends having automated savings such as debit orders to go to a savings account, no matter how small. 'Make your savings contribution as non-negotiable as your rent or electricity bill. Over time, these small efforts build a financial safety net that gives you options when times get tough.' Beware of the future cost of instant gratification Before considering withdrawing your 'two pot' or retirement savings, Coelho warned South Africans to weigh in the true cost. 'Are you sacrificing your future financial security for immediate gratification? Instead of using these funds for discretionary spending, consider prioritising debt reduction, investing in essential skills or education to improve earning potential, or building a genuine emergency fund that doesn't compromise your retirement nest egg. Use the right tools Coelho suggests the RCS credit gateway tool, which gives consumers free access to their credit reports and scores. 'This tool offers insight into your financial standing and provides personalised budgeting tips and support services, helping you take control of your finances while working towards financial wellness.' Be prepared for the unexpected While it's impossible to predict every financial challenge around the corner, having a savings plan ensures we won't get knocked off our feet, Coelho said. This is about spending smarter such as buying in bulk or opting for generic brands. 'National Savings Month reminds us that saving is a necessity for anyone managing rising costs and limited income.'
TimesLIVE
09-07-2025
- Business
- TimesLIVE
Is the culture of ‘black tax' making it harder for young South Africans to save?
July is National Savings Month, a time to reflect on our financial habits and the importance of building a safety net. While government and the private sector continue to pour resources into educating South Africans about saving and managing debt, the reality is many consumers remain deep in debt and struggle to put money aside. One factor often raised in the national conversation is the pressure of 'black tax', the financial support many young earners provide to their extended families. For some this is a proud responsibility rooted in cultural duty. For others, it is a major obstacle to financial freedom.
