Most South Africans unable to save anymore

Most South Africans are unable to save anymore, but it is not because they do not want to: they simply cannot afford to.

Where they were a bit carefree with money a few years ago, they now cannot make their salaries stretch any further.

According to accounting firm Deloitte’s South African Investment Management Outlook for 2023, South Africa’s savings rate is at a shocking level compared to its emerging market peers, sitting at a dismal 0.5% in 2023.

The latest survey by Debt Rescue reveals that not being able to put money away at the end of each month is the biggest concern weighing on the minds of South Africans, with a massive 67% of people citing this as their biggest challenge when it comes to saving although that is unsurprising due to the escalating cost of living.

The survey was conducted among 2 000 South African consumers aged between 25 to 65.

It shows the significant obstacles to saving people currently face, with 46% of respondents citing insufficient income to cover basic necessities as their biggest challenge.

However, it is encouraging that the majority of respondents recognise how vital it is right now to have a nest egg of some kind and are actively looking for ways to improve their savings habits.

Although 61% deemed saving extremely important, only 16% can save with every pay check and 50% of the respondents saved less than 5% of their income.

ALSO READ: Savings month: this is what South Africans save for

No room to save

The poll was aimed at understanding the saving behaviour and financial challenges facing consumers right now, Neil Roets, CEO of Debt Rescue, says.

“It may seem impossible to stretch the budget even one cent further, yet it is vital to have a financial cushion to lean on.”

The survey results show that 43% of respondents considered or have already started cutting down on non-essential expenses to find some way of putting money away for an emergency fund, with 49% saying this is their primary savings goal.

The majority (91%) are actively trying to improve their saving habits.

Roets encourages consumers to use tools and apps designed to assist them with budgeting, tracking expenses and achieving savings goals.

He says 73% of respondents do not use any tools or apps to help them with their planning, although taking this step could be the changemaker they need.

“By integrating technology into your financial management plan, you can gain greater control over your finances and cultivate a habit of regular saving, even if you start off with just a few rands a month.”

Roets says it has never been more important to budget.

“Even drawing up a simple spreadsheet showing income and expenditure will provide a realistic picture of where there are opportunities to make changes.”

ALSO READ: Want to be more like a billionaire? Try saving like one

Use technology to help you save

He recommends that consumers try apps such as Mint, Goodbudget and YNAB (You Need a Budget) that provide comprehensive budgeting tools.

“These apps help you to track expenses, set financial goals and gain insights into your spending patterns. By visualising your financial standing, you can make informed decisions and prioritise saving.”

Apps like PocketGuard and 22Seven allow you to monitor your expenses in real-time, categorise spending and identify areas where you can cut spending.

By gaining a clear understanding of your financial habits, you can make conscious adjustments to allocate more funds toward savings.

Or try one of the goal-setting apps.

Roets says Goalsetter is one of the best money apps for the whole family, while SmartyPig provides a visual representation of savings goals, making the process more engaging and motivating.

These apps enable users to track progress, set milestones and celebrate achievements along the way.

Roets believes that by adopting a proactive approach, harnessing available resources and seeking financial education, South Africans can transform their saving behaviour and improve their overall financial well-being even in the face of the high cost of living that shows no signs of abating.

“We understand that South Africans struggle to meet daily costs, never mind setting aside money for savings. We are deeply concerned about the escalating debt spiral that over 18 million consumers, more than a third of the population, face this year.”