Ina Opperman

By Ina Opperman

Business Journalist

Times have never been tougher for consumers, which is why they do not save

Times have never been tougher for South African consumers. Here's how to save this National Savings Month.

South Africans are notorious for not being good at saving, but there is a reason they do not – they simply cannot afford to. Times have never been tougher for consumers, which is why saving is at the bottom of their list. It is not for lack of will to put money away.

With National Savings Month celebrated in July, the focus moves to promoting financial freedom. South Africans would do well to prioritise putting money away to ensure a more financially secure future for themselves and their families – no matter how trying circumstances may be, Neil Roets, CEO of Debt Rescue, says.

“The reality is that South Africa has one of the lowest savings rates in the world. Right now, most people simply do not have very much left in their bank account at the end of each month. Yet, we must all find ways to save, no matter how difficult it is. Saving money is the route to financial prosperity and stability.”

Consumers are not too lazy to save, they have many obstacles

It is certainly true that the persistently high interest rate, the exorbitant cost of petrol and now a double-digit increase in electricity costs across major metros, left South Africans struggling to get by and eroding much of the savings they may have accumulated.

The Deloitte South Africa Consumer Signal report for the first quarter of the year reveals that South African consumers currently prioritise expenses such as groceries and housing; while saving and investment are at the bottom of their list, warranting only 6% of their spending.

“However, saving money does not necessarily require drastic changes or sacrifices though. By making a few minor adjustments, it is possible to cut back on those expenses that eat away at potential savings. Often, small adjustments in our daily purchase and consumer habits can make a significant difference,” he points out. 

You can use these actionable tips that make a real difference in the lives of people seeking to bolster their financial health:

ALSO READ: Higher-for-longer interest rates unique opportunity for savvy savers

Start with a budget and learn to save

“This may sound very basic, but saving money starts with creating a budget, as it is the only way to determine where your cost-cutting opportunities are. By going through your bank statements and drawing up a simple spreadsheet to show income and expenditure, it becomes a lot easier to spot possible savings opportunities.”

Be a savvy shopper and save

When it comes to buying bigger and more expensive consumer goods, doing your comparative research online first can translate to big savings. Also, sites such as Gumtree and Facebook Marketplace provide a vibrant second-hand market and there are bargains to be had if you take the time to search. Similarly, apps such as Yaga have created a burgeoning market for pre-loved fashion for both buyers and sellers.

Gear up for grocery shopping

The first rule is to have a shopping list and stick to it, rather than making impulse purchases. Make sure to check the special offers pamphlets for the week when entering the grocery store and avoid shopping while you are hungry, He says.

“Also, buy in bulk whenever possible, as this can shave hundreds of rands off your budget. If you are using delivery apps for groceries, daily emails will alert you to the specials of the day and discount offers. Free delivery offers also abound.”

Planning and prepping meals

Start a meal plan for the week and create a shopping list based on this, Roets says. “With meals organised ahead of time, it is possible to ‘batch cook’ meals and portion them to deep freeze for later.

“Not only does it save time, but with meals prepped beforehand, it will deter you from indulging in expensive takeaways. Also, do not forget to pack your work lunches for the week as the alternative is expensive stops at the fast-food outlet nearby, the local coffee shop or cafè.”

ALSO READ: Young people: you are probably doing better with your finances than you think

Energy efficiency for the win

Investing in energy-efficient appliances and devices might have a higher upfront cost but doing so will save you money on utility bills in the long run. With winter in full swing now, it is also worthwhile paying close attention to one of the biggest energy guzzlers in the house – the geyser.

“Installing a timer to switch your geyser on and off can drastically diminish costs and so too an energy efficient geyser element. Switching from an electric heater to a gas alternative can also bring down the bills.

Loyalty rewards

Many South Africans already benefit from the rewards programmes offered by banks and certain medical schemes. Roets says with cash back or discounts on offer, it is worth participating in these.

“Remember, these programmes are usually tiered, with more savings to be had the higher you rank. Most retailers also have no-cost loyalty cards which can have significant savings.

Get help with your debt

According to data aggregation company SearchWorks, the average South African consumer allocates about 62% of their take-home pay towards servicing debt – with the household debt-to-income ratio projected to hover around 65% in 2024. This frightening statistic points to a nation drowning in debt and the reality is that it is becoming increasingly difficult to prioritise investment and savings.” 

Roets says his advice to those who find themselves in a debt trap is to seek help through debt review, where a registered debt counsellor can assist you in managing your financial predicament. It is never too early to ask for help,” Roets concludes.

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