July is Savings Month in South Africa, and this year the focus is firmly on finding #waystosave and adapting financial plans as we face the challenges 2020 brings. The South African Savings Institute (SASI), in association with Absa, will focus on financial education throughout July, bringing together financial experts to provide tangible insights on savings in the #waystosave Webinar Series. #waystosave is an initiative of the South African Savings Institute (SASI) in association with Absa.
The pandemic has pivoted many into digital communications, and SASI is no exception. SASI acting CEO Gerald Mwandiambira says, “We’re focused on building a savings culture in South Africa and we’re excited to be able to reach large audiences through this free webinar series as we share knowledge from South Africa’s leading personal finance experts to help people make smarter money choices. The environment is very challenging at the moment, and we’re addressing relevant and topical issues including rebuilding your finances post COVID-19, bouncing back from retrenchment and saving through stokvels. We invite people to come on this journey with us and tackle money challenges, head-on.”
The #waystosave website includes a full online learning platform which will launch as the webinars progress during July, including challenge quiz formats. Those who register and complete the challenges could win R10,000 in a tax free savings account. Cash is also up for grabs during the webinars and a total of R20,000 will be given away, with several awards of R1,000 in each webinar set to boost the savings those who participate.
Hosted by SASI acting CEO and personal finance author Gerald Mwandiambira and SASI Chairperson Prem Govender, the webinars kick off on 8 July at 19h00 with the launch webinar featuring award-winning personal finance journalist and author Maya Fisher-French; financial journalist, speaker and entrepreneur Arabile Gumede; CEO of Just One Lap and host of the Fat Wallet podcast; Kirstia van Heerden, medical practitioner, broadcaster and social activist Dr. Sindi van Zyl and Group Head of Wellness at Absa Dr Lesego Rametsi.
SASI Chairperson Prem Govender says, “As we deal with the impact of COVID-19, we need to be well equipped to make decisions such as taking payment holidays or accessing savings. Now more than ever, we need to focus closely on our finances and get expert advice.” Govender cites Wave 2 of the Stats SA surveys, which indicates that respondents are increasingly accessing savings due to reduced income as a result of lockdowns. While more than half of respondents said that their income has stayed the same since the national lockdown started, 25,8% reported a decrease in their income, mostly due to business closures. 75% of those with reduced incomes have reduced their spending to compensate, and half accessed savings to close the income gap. While 14,6% used UIF claims, one in three relied on extended family members, friends and/or their communities for support.
The Financial Stability Review published in May by SARB says that household finances remain under pressure, in line with challenging economic and employment conditions. Credit extension to households increased faster than disposable income in 2019, reflecting a trend change. This increase in lending and how households are using more of their disposable income to service debt are key concerns for the savings rate. The composition of household debt has also moved increasingly towards higher-cost forms of financing.
“Households are spending the highest amount of their disposable income on servicing debt since 2016,” says Govender. “In our increasingly tough economic environment we need to find ways to avoid the credit trap. We must fundamentally stop living beyond our means and drive a savings culture to break the cycle of inter-generational debt.”
Thami Cele, Head of Saving and Investments at Everyday Banking, Absa Retail and Business Banking, says that while saving in the current environment may seem very challenging, it’s important to have a holistic understanding of your financial situation and focus on what you can do. “It’s time to arm yourself with the knowledge to access tools and make sound saving and investment decisions. The #waystosave approach is designed to last beyond July Savings Month and will help people to access the expertise and help they need to get on a solid financial footing.”
Gerald Mwandiambira, SASI acting CEO, says it’s important for South Africans to look towards developing innovative savings alternatives and reinforcing positive savings behaviour. “Cultivating a culture of savings and promoting alternative savings solutions in all spheres remains the focus of SASI and our dedicated partners. Let’s find our #waystosave – it’s never too early to start.”