Having just recently entered a recession, and faced with ongoing political turmoil, South Africa is sitting in a precarious position. From retailers to manufacturers to family-run corner cafes, businesses are simply struggling to survive. For consumers and cash strapped families, the outlook is no different. There is little room for careless spending, as families watch their debt rising amid the escalating cost of basic living expenses. As we enter National Savings Month, now is a critical time for people to consider their financial well-being, and to carefully plan for what will undoubtedly be a difficult year ahead.
“The key is awareness – it is so important that people realise that they can take charge of their financial health and future, simply by educating and empowering themselves,” says Laurence Hillman, MD at 1Life, a South African life insurance company.
Through education and self-empowerment, he explains that South Africans can begin to create a more sustainable approach to their financial lives – and thus begin to establish a savings culture.
Sadly, we are currently far from being a financially savvy nation.
According to statistics released by the National Credit Regulator (NCR), the total outstanding debt owed by South African consumers has increased to R1.66 trillion. This is amid a financial climate of uncertainty, whereby the cost of borrowing is only likely to increase. S&P Global and Fitch downgraded the country to junk status earlier this year, prompting negative reactions from both local and foreign investors.
“Despite all this gloom, South Africans are in fact well positioned to begin to harness the many financial tools and resources available to them,” notes Hillman. “We are a tech savvy, information hungry and highly resilient society, and individuals can quickly gain control over their financial lives if they choose to do so!”
Increasingly, there are a number of structured and highly accessible programmes available – both online and offline – for people to master the fundamentals of budgeting, saving for retirement and managing debt.
Such programmes include Truth About Money, a 1Life initiative, which seeks to make financial education accessible to all South Africans.
“This financial education course promotes financial freedom for consumers and covers all aspects relating to finances, including; setting up a budget, savings and investments, how to manage our money and make it work for you, in a way that enables those registered to the course to make a change for the good within their lives,” says Hillman.
In addition to making changes to their own financial behaviours, families should also ensure that children and young adults are taught about savings and basic finance from an early age. Research has shown that children as young as three years old can grasp key financial concepts like saving and spending. One report released by the University of Cambridge and commissioned by the United Kingdom’s Money Advice Service found that kids’ money habits are formed by age 7!
“Instilling a strong savings culture has become more important than ever before,” notes 1Life’s Hillman. “The responsibility lies with parents, individuals, business leaders and policy makers – we all have to begin to empower ourselves and those around us.”
This National Savings Month, 1Life is giving Moneyweb readers a chance to WIN guaranteed access to a financial literacy course through its Truth About Money initiative, worth R2 500 each. This initiative has helped thousands of South Africans, and now it’s your turn to take charge of your finances!
Complete the survey below to enter.
You can also read more on Truth About Money here.