Freepik
The South African Savings Institute (Sasi) kicked off its annual July Savings Month activities by encouraging South Africans to come up with innovative ways to save.

Sasi chairperson Prem Govender introduced the month-long initiative as an opportunity to generate awareness about savings issues and contribute to the financial well-being of local consumers.

The latest savings statistics make for grim reading. Sasi noted that the household savings rate had plunged from an already poor 0.4% of gross domestic product last July to negative 0.5% this year, effectively labelling South Africa as a nation of dis-savers.

And while levels of household debt have improved slightly, from 82% of disposable income five years ago to 71.9% today, there are concerns that this improvement is due to a tougher lending environment rather than improved consumer financial behaviour.

This dis-saving trend contrasts starkly with the experience in emerging economies like India and China, which boast household savings rates well into the double digits, despite average incomes being up to three times lower than locally.

South Africa faces an uphill battle to bolster its ailing savings culture at a time when economic hardship is making it increasingly difficult to save. Lacklustre economic growth, rising unemployment (particularly among the youth), “cost of living” increases and a rising tax burden all helped to turn our poor savings culture into a systemic developmental issue.

“We believe South Africans can save and invest more locally for the betterment of our economy - domestic savings can be a driver of internal economic growth,” said Govender. She added there was a growing need to equip the youth with savings know-how to directly impact their earning power, wealth creation abilities and access to basic comforts.

The key focus at Sasi and its dedicated partners remains to cultivate a culture of savings. The institution leverages its July Savings Month initiative to kick-start various pro-savings initiatives countrywide.

For this year the institute has partnered with a non-profit firm, the Financial Services Consumer Education Foundation, to roll out workshops that grow savings awareness and encourage better financial decision-making among the youth.

Sasi has also launched an innovative online competition to “put the fun back into saving” and are asking consumers to share their craziest ways to save. “We are engaging with the youth using #CrazyWaysToSave,” concluded Govender. “The intention is to spark and sustain a national conversation on how everyone can find ways to save, no matter how unconventional these ways may be.”

PERSONAL FINANCE