Less saving is likely to increase debt, say financial experts

Experts have warned that South Africans without a savings plan are likely to fall in debt, which might cause long term financial problems.

In a recent BDTV interview MMI’s Rowan Burger said the latest MMI Unisa Consumer Financial Vulnerability Index (CFVI) study, had shown that the people who feel most vulnerable financially are those who don’t budget and have a financial plan.

He also said these people are likely to get into too much debt that they are unable to survive, eventually getting into a debt spiral and using up their entire balance sheet.

African Bank’s Mellony Ramalho also said this was pointing to a poor savings record.

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Last year, Statistics SA and Trading Economics released a report stating that the average South African household’s savings was down by -2.30 percent in the third quarter of 2016, branding South Africans as one of the world’s worst savers.

These statistics prove that South Africans are battling to save money.

Seven tips that can help you save easily:

• Make a list of all your expenses. This will help you determine where you can cut down on unnecessary costs.

• Draw up a grocery list. Writing down a number of essentials you need, will also help you have more self-discipline by sticking to the list and not buying impulsively.

• Eat-in instead of at restaurants. If you’re skipping restaurants for a few months, you will realise how much money you spend when eating out and tipping the waiters and how much you can save by eating at home.

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• Carpool to work. Get a friend or colleague to carpool with you on your way to work and split the petrol costs. The more friends or colleagues you have in your car, the cheaper the trip.

• Be on the hunt for freebies. Browse the net for free concerts, free entrances to nature reserves and parks or check regularly for any special discounts that may be of interest to you and your family.

• Apply for a debt consolidation loan. Debt consolidation loans are a great way to settle outstanding loan payments into one account at a rate that is affordable for you.

• Invest your savings. If you’re saving for a long-term goal, open a notice deposit account which allows you to add money monthly while your investment matures. This type of account is ideal if you’d like to be strict on your savings as you cannot withdraw money before the maturity date set by yourself.

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