South African households have debt of R1,1-trillion and only R1,3-trillion saved for retirement. Our household balance sheets are sickly and a significant economic downturn will mean there is even less money available for savings.
To encourage South Africans to save more and spend less, the South African Savings Institute (Sasi) has launched a Festive Savings Campaign.
We are approaching that time of year when we spend ourselves silly, only to start the new year with massive credit card bills.
Sasi would like to see South Africans being more pragmatic, with saving rather than spending being a priority.
Elias Masilela, chairperson of Sasi, says South Africans face a threat of unemployment as the global economic crisis worsens.
Rather than spending their annual bonuses on holidays and gifts, Masilela advises South Africans to save spare cash as a buffer against the risk of unemployment.
Last quarter 74 000 South Africans lost their jobs. This figure could rise if large corporations have to restructure in the face of a global meltdown.
Masilela says the dependency ratio in South Africa is about 4,5. In other words, for every household with four to five people there is only one breadwinner. The ratio will rise if job cuts kick in.
It may not be you who is made redundant, but a family member who will turn to you for support.
How to stay in control
1. If you have not saved money to spend over the festive season, do not borrow money.
2. Turn your home into a holiday house. Instead of going away this festive season, spend the holidays at home, advises Mpho Thekiso of the National Credit Regulator. Our own homes are often more comfortable than the places we visit.
3. When it comes to gifts, it is the thought that counts, not the value. Thekiso suggests going through your wardrobe and finding those impulsive purchases you never got to wear (maybe that size 34 was a bit optimistic?) and give it as a gift to someone who would wear it.
4. Give the children in the family a money box with a little cash donation to get them started.
5. When having your celebratory feast, ask each family member to bring a dish and spread the cost of the meal.
6. Send an SMS to friends over the festive season rather than make a call. If you do make a call, wait until off-peak times (after 8pm).
7. Rather than giving your money to charity, give your time. Volunteering is far more valuable.
8. Sasi chairperson Elias Masilela says you cannot live within your means if you don’t know what those means are. Draw up a budget and understand exactly how much you have to spend.
9. Plan for coming expenses. Remember, you have school fees and uniforms to pay for in January. Put money away now for this.
10. Have a vision. Thekiso says research has shown that people do not respond positively to threats. So set yourself a positive goal, something you can work towards. You will find it easier to walk past those tempting shops if you have an image of attending your daughter’s graduation ceremony or a picture of your dream holiday in your mind instead.
11. Despite what the advertisers tell you, just because you have bought an item on sale does not mean you have saved money.