South Africans are bad at saving money! Let’s see what the National Savings Month is all about.
July is National Savings Month in South Africa and even if you don’t feel that it’s relevant to you, we can all do with a reminder of how to manage our finances better. It’s also a great opportunity to remind our colleagues and those we interact with about the importance saving money, setting goals and how to avoid the terrible pitfalls of debt.
Of course, you don’t have to wait for a specific month or awareness campaign to kick off. Evaluating your own financial goals and raising awareness of the importance of saving should be ongoing.
What does this mean for you?
It’s easy to think that your finances are al sorted and that you’re in a great position, but it’s good to check that you really are on track.
A useful starting point is to calculate your net worth. This is relatively simple and involves you listing all assets, investments, bank accounts and cash on hand that relate to your personal finances. And then, listing your liabilities (debt). It’s obviously important to be as detailed and as honest with yourself as possible as this will give the most benefit.
It can get tricky if you have a Trust or business as these assets and investments are often owned by the trust but meant for your personal benefit. There is no right or wrong way to track this in your net worth calculation, you’ll need to do what makes most sense.
Two very important figures that we need to analyse from this excise though are our Retirement Investments (any investments that we have set up to fund ur retirement) and Debt (specifically short-term debt). The goal would obviously be to increase the fist figure as much as possible and decrease the debt to zero.
If you’re fortunate enough to be in a position where you know how to manage money and understand basic financial principles such as compound interest, the value of long-term investing and how to manage your money in a month-to-month basis; then you have a responsibility to share this knowledge!
Many South Africans are desperate to understand how to manage their money better and even though you may find it “really basic”, people need to be taught some fundamental aspects of money. You can use the National Savings Month as a way to start conversations with people you know and interact with and you could even start a discussion group at work to chat about concepts such as budgeting, saving, goal setting, investing, etc. See how Tebogo chats about money with his work colleagues.
If you’re part of the management team at your company you could also consider bringing in an expert to run a money workshop. Don’t underestimate the importance of financial education.
Statistic show that we’re really bad at saving money. Many people just can’t afford to save as they’re paying most of their salaries towards debt which leaves them in a position of needing to borrow more just to survive. And those who can afford to save are often just living the good life with no regard for the future.
Whatever your own position, take a moment to consider if there are any areas where you could improve your spending and savings habits. Think too about who it is that you could help and by what means.
PS – See what I said last year about National Savings Month