Put Money Aside for a Rainy Day
JULY is designated as savings month, but currently, many South Africans face challenges in covering their bills, purchasing essentials, managing debt, and simply getting by.
Having a separate savings account these days can feel like an indulgence.
To start saving money, I encourage individuals to revise their habits. Focus on small, manageable changes—like comparing grocery prices, monitoring bank fees, and controlling electricity expenses—rather than simply depositing funds into a savings account.
Everyone is facing difficulties in one form or another. Our wages have not kept pace with the increasing cost of living.
Don’t let guilt or shame overwhelm you due to your financial situation. Channel that energy toward seeking solutions.
Solutions can vary greatly. It may involve conversing with creditors, entering debt review, reverting to a more fundamental lifestyle by drafting a budget on paper, or engaging with family to discuss spending adjustments, tightening belts, and prioritizing mental health during these financial hurdles.
So how are we expected to save while grappling with stress just to make ends meet?
Sarfaraaz Hamza, CEO of ezDebt, advises South Africans to make an effort to save, even in the smallest amounts. “South Africans ought to consider their overall financial health, which includes comfortably managing monthly debt payments (while aiming for debt freedom) and having a safety net of savings along with a financial plan for retirement,” Hamza stated.
Hamza recognized the struggles encountered by South African consumers and provided valuable tips for enhancing household savings:
Many people continue to neglect creating a household budget. You have to begin somewhere. Each month, total up your after-tax income and subtract your expenditures. Numerous apps, including banking apps, can aid in budgeting, or you may prefer the traditional method—writing down all income and expenses. The crucial part is honesty and developing a practical budget that you can adhere to.
- Withdraw a fixed amount of cash each week
Using cards and contactless payments makes it easy to overspend since no physical money changes hands. One effective way to control your spending is to withdraw a fixed amount of cash for the week and minimize card usage.
- Cut back on take-outs and daily coffee and lunch expenses at work.
It may be challenging to break the habit of take-out meals, but consider calculating how much it costs you monthly. The same goes for buying coffee and lunch every day at work.
- Revisit price comparisons—be strategic and practical about it.
Many businesses utilize social media platforms like Facebook, TikTok, and WhatsApp to advertise their weekly deals. Make an effort to compare prices, but also assess the distance required to obtain those deals. It doesn’t make sense to save R10 on a laundry detergent if it incurs R100 in fuel costs. Ensure that the savings are worthwhile overall.
- Monitor your electricity expenses
With rising electricity tariffs, we must consciously review our electricity consumption and expenditures. There’s no shame in turning off lights, geysers, and appliances; each household must find solutions that work for them.
- Leverage loyalty programs
Loyalty programs aren’t free; they reward your loyalty to a brand. As the saying goes, “never look a gift horse in the mouth.” Take advantage of discounts and specials available to you—you’ve earned them.
- Avoid shopping or spending as a means of emotional relief
Shopping often provides a temporary high and can momentarily distract from feelings of anxiety or depression. However, it can have severe repercussions on your finances. If you find your shopping habits spiraling, confide in a friend, replace it with another healthy activity, or seek assistance from a healthcare professional.
- Be mindful of banking fees
Make a concerted effort to review your banking charges. Do you need to spend extra money monthly for a specific colored card with features you don’t utilize? If you rarely travel, why pay for costly features such as overseas promotions or lounge access?
- Manage your debt wisely.
Acknowledge your debt rather than deny it. Prioritize paying off the most expensive debt first (the one with the highest interest rates).
Hamza added: “Cutting back on spending in one area just to overspend in another makes little sense. Instead, save the money you conserve through reduced spending—whether in a piggy bank, soda bottle, or a bank account—for when you really need it. We need to shift our mindset from seeing saving as a luxury to recognizing it as a necessity.”