#SavingsMonth promotes the culture of saving
According to the Old Mutual Savings and Investment Monitor, the culture of saving in this country is currently not good.
Savings Month this year comes at a time when nearly half the country’s households are saving less than they were in the past year.
This was revealed on Tuesday during the release of the findings of the latest Old Mutual Savings and Investment Monitor.
The study which tracks the shifts in the financial attitudes and behaviors of South Africans found that 49% of households are not saving enough.
This according to the study is the lowest since 2009 when the country was recovering from the 2008 recession.
The findings are of serious concern because they don’t only affect households but they implicate on the economic growth of the country as well.
“Low savings lead to low growth, which leads to even less saving thereby creating an ongoing vicious cycle,” said Rian le Roux, Old Mutual Investment Group (OMIG) economist.
This is worrying according to le Roux because it means that people in this country are spending more than they earn.
“The majority of households are not accumulating enough of a financial nest egg to finance future liabilities such as their children’s education and their retirement,” he said.
The culture of low saving can be attributed to poor planning and people drowning in debts through loans.
Le Roux’s advice is that people should start paying themselves first by setting aside a certain amount of money at the beginning of every month.
Lynette Nicholson who is the research manager at Old Mutual said the timing to release the findings of the study was deliberate as the country commemorates Savings Month.
“We want to heighten the awareness about the importance of saving. The findings show us that the culture of saving in this country is currently not good so we want to get people energised and take control of their finances by saving,” said Nicholson.
Savings Month was initiated by the South African Savings Institute (SASI) with an aim of encouraging a culture of savings in this country. The theme for this year’s Savings Month is, “Celebrating Savers and Savings.”
