According to Business Tech, “South Africa has a poor saving culture and the pandemic has exacerbated the situation”. A recent practical event was the impact of Covid-19, which caused the economy to be dysfunctional for a couple of months. Most businesses’ and employees’ income was severely affected. However, bills and other financial obligations had to be funded, irrespective of the impact of Covid-19, including municipal rates, medical expenses, and groceries, to name but a few. Savings come in handy in such events.
An individual should have three types of savings:
Emergency funds – to cover you for unplanned, unforeseen circumstances, like a car breakdown or an unexpected school trip.
Medium-term savings – these saving refers to durable items like furniture and the deposit for a vehicle.
Long-term savings – to cater for a deposit for a home loan or buying a car in cash.
Developing a saving culture is an excellent habit to cushion you from unforeseen events that have the potential to negatively affect your financial progress for some time.
Lastly, it is not too late to start saving, irrespective of the amount. The most important step is to get into action and commit to the amount you have decided to put aside.
– Sibusiso is a professional in the financial services sector in Carletonville.