How on earth are most South Africans expected to save?

Picture: iStock

Ironically, the people who earn the least appear to be the most savvy with their money, while most working people have no money left by the 15th of the month.

If the majority of working South Africans are too broke to make their salaries last till the 15th of the month, can they realistically be expected to save?

Savings Week has resulted in the financial sector churning out reports illustrating just how hard it is for South Africans to make ends meet.

However, data coming out of studies like the World Wide Worx survey, More Month Than Money, brought to question whether certain people can afford it.

The survey showed most people blow through their salaries by the 15th of the month.

Fintech entrepreneur and author of the book How to Spend Your Money like a F***en Grown Up, Sam Beckbessinger, questions whether simply telling people to save more money is the answer.

She says: “What we’re seeing, mostly, isn’t a crisis of people … spending foolishly on shopping or cocktails.

“South Africans are stretched too thin financially. People are trying to do their best in the context of an economy that is struggling to provide enough jobs, and enough good jobs.

“Reports like this are helpful because they show us how many people are struggling to get by.

“Let’s be careful not to turn it into a finger-wagging exercise.”

More than three-quarters of the study’s respondents ran out of money before the end of the month and 43% borrowed money to get through the month. Only 9% borrowed from banks; 20% used credit cards and 59% got loans from family and friends.

TymeBank deputy chief executive Tauriq Keraan said he hoped insights from the study would help consumers take control to “work towards their goals and reach their full potential”.

But Beckbessinger argued that the most financially constrained demographic appeared to be the most savvy with their money.

“People on the lower end of the income spectrum are usually the most careful about budgeting and managing their money carefully,” she said.

“We have a long history of people with low incomes, especially women, who find ways of using stokvels and burial societies to stretch their money further. Even though they’re under the most financial pressure, they still find ways to put money away.”

TymeBank’s head of sales and service Cheslyn Jacobs concluded that although financial constraints affected the majority of working people, it was imperative to introduce the culture of saving at any level of income.

“The psychology of it is that the more you see your money growing, the more you want to save.

“How it comes to play is that you can run out of money in the middle of the month and still have no idea what you spent that money on.

“I encourage people to ask themselves, what did you spend your last R1,000 on? If you can answer, then you are possibly doing well, but if you can’t, I can guarantee that you did not need to spend that money.”

simnikiweh@citizen.co.za

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