July is National Savings Month, and bank executives said consumers should set goals and implement small steps to try to put money aside for a rainy day, despite the fact that many households were finding it difficult to make ends meet. Photo: File
July is National Savings Month, and bank executives said consumers should set goals and implement small steps to try to put money aside for a rainy day, despite the fact that many households were finding it difficult to make ends meet. Photo: File

Take small steps to save

By Given Majola Time of article published Jul 2, 2021

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JULY IS National Savings Month, and bank executives said consumers should set goals and implement small steps to try to put money aside for a rainy day, despite the fact that many households were finding it difficult to make ends meet.

Cowyk Fox, the managing executive for Everyday Banking at Absa Retail and Business Bank, said yesterday the rising unemployment had placed an increased financial burden on many households.

“However, when it comes to banking, minor behavioural changes can go a long way in putting money back in people’s pockets.”

In addition to its Covid-19 relief initiatives, which included R9.8 billion in payment relief, Absa announced pricing relief of R500 million to customers earlier this year to mitigate against the financial impact of the pandemic.

African Bank said the lockdown had been tough for many South Africans over the past 18 months, while many people had also gained financially from being forced to stay home and having limited access to “normality”.

Sarika Maharaj, the product manager at African Bank, said with the country back to level 4 restrictions, there might be one bright light to hang onto.

“Certainly, we saw last year how working from home saved fuel, having to stay home saved unnecessary trips to the mall, and with restaurants and fast-food outlets closed, families also saved on this type of spending,” said Maharaj.

The ban on gatherings and the implementation of social distancing meant people had to rethink big bashes they had planned, such as weddings, birthdays and other celebrations. Some plans may have been abandoned altogether and others may have been scaled down dramatically.

“If saving money in lockdown has made you realise how much you spend on unnecessary things every day/month/year, then why not make saving a lifelong habit, instead of seeing the inability to spend money as you please as a lockdown ‘curse’? Some of us may have started well, but lost track over the last couple of months. The current two-week lockdown period provides an ideal opportunity to get back on track,” said Maharaj.

First National Bank (FNB) consumer education programme manager Dhashni Naidoo said for many people, the idea of saving was something that they feared they could not achieve, particularly during these trying times.

“Financial challenges, such as loss or reduction in income and rising cost of living, inhibit our ability to save. However, small, gradual changes in how you manage your day-to-day money matters and how you think about money can result in positive savings behaviour,” said Naidoo.

FNB said saving meant putting aside money regularly to help you achieve different goals-saving for emergencies, education, retirement or to buy goods.

“The act of putting money aside every month requires determination and discipline. And choosing the right savings product to match your saving goal is important. Saving, even small amounts, is important for our financial well-being and resilience, ” Naidoo said.

Naidoo said changing your spending behaviour and attitude could go a long way to help one achieve your goals. Having financial goals was important, as it would help customers break their goals down to groups of short-, medium- and long-term goals as a more practical and manageable approach could make their saving journey a lot less overwhelming, said Naidoo.

In an article commissioned by BreadCrumbs Linguistics — a Behavioural Linguistics firm specialising in nudge-based communication for the South African Savings Institute last year — said that among many other fundamental flaws that the Covid-19 pandemic had revealed about the structure of the South African economy and its impact on society, it had exposed and magnified the issue of not saving for a rainy day both on South African households and on a national level.

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