Speaking at the Savings Month launch in Sandton on Wednesday, Barclays Africa's Vusi Ndwandwe said a sufficient savings buffer is at least three months' income, that would cover your normal expenses as if you were receiving a regular salary.
But we doubt that this is the case with many South Africans, considering the decline in the country's savings rate for the last 16 years. And just recently, over three-quarters of South Africans reported to be financially stressed, and many are said to be over-indebted.
The South African Savings Institute, however, believes all is not lost as there are alternative ways South Africans who are already under pressure but still want to save can at least explore:
- 13th Cheque: Ask your employer payroll to save for a 13th cheque paid to you in December by lowering your salary. This extra pay cheque will allow you to ride out the festive season and New Year expenses without major impact on your finances.
- Financial Wellness Days: Ask your employer to give mandatory time off to review your finances with a Financial Planner once a year. Regular meetings with a Certified Financial Planning Professional will help you remain in control of your finances.
- Group Savings: Start of Join a Stokvel or Investment Club with family and friends. The group will encourage you and allow you to develop the discipline required to be a regular saver.
- Savings Buddy: Allow your partner or friend to be a savings buddy whom you meet with regularly to discuss your savings journey. By holding each other accountable, you can help each other to grow wealth.
- Financial Products and Insurance: Shop around and use a financial institution that rewards consistent savers either through a high savings interest rate or cash back for no claims.
The Institute's Prem Govender said, "We believe that South Africans can save and invest more domestically for the greater good of our economy. As we sit in a technical recession, it is a fact that domestic savings can be a driver of internal economic growth."
It is also a fact that saving can make you happier. The Institute cited research that shows that people who save enjoy better peace of mind, feel better equipped for the unknown and are even more productive at work.