20 ways to be savings savvy – SASI #waystosave builds savings knowledge

The South African Savings Institute (SASI) in association with Absa ran the annual series of #waystosave webinars featuring leading personal finance experts this July Savings Month, with sessions focused on student saving, stokvels, entrepreneurs and female financial fitness. A wealth of practical information on savings resilience and money management continues to be shared, with many focusing on finding financial resilience. Both the 2020 series and the new 2021 series can be viewed at www.waystosave.co.za.

To celebrate SASI’s 20th anniversary this year, here are twenty key #waystosave learnings.


SASI CEO Gerald Mwandiambira emphasised that it’s key to open those bank statements, portfolio reports and bills. “How do you speak the language of money? Understand the numbers and manage them. After all, the numbers don’t lie! If you’re not talking to your money, it’s not talking back to you.”


Living below your means affords you the freedom to save and invest. Don’t get trapped in the lifestyle creep circle, where the more you earn the more you spend.  Mwandiambira says the COVID-19 crisis has highlighted the importance of having a plan in place and being in charge. “My acronym is FATE: be in control of Food expenses, cut back on your Accommodation and Transport costs, and rethink your Entertainment and even Education. Even before the pandemic, South Africa was mostly a nation of non-savers, with finances in poor shape. We need to now see what we can do to rebuild our fragile financial situations.”


While many of our peers in SADC, sub-Saharan Africa and BRICS have positive savings rates; South Africans save substantially less than them. Personal finance journalist Maya Fisher-French believes that easy credit is to blame, which hasn’t allowed people to build a culture of saving.  “In many other countries, if you want to buy something you save for it. In South Africa, people don’t think like that: they think in terms of ‘how can I access credit’, and often don’t even consider the interest rate,” says Fisher-French. “South Africans pay R168 billion a year in fees and interest on credit. Imagine if that was channelled into investments!”

 Fisher-French says most people don’t understand how much they pay in fees and interest, as these amounts are often not transparent, especially when it comes to credit cards.  “If you spend R20 000 on a credit card and never touch it again, thereafter paying only the minimum monthly repayment, few people would be aware that it would take them 25 years and R53 600 to finally pay off that balance at an interest rate of 20% to 25%. From my experience, most people imagine it would take them about two years to pay it off, because few realise they are paying roughly 3% of a reducing balance, not a flat percentage. If a person is constantly using their credit card, this slowing-down effect becomes obscured,” says Fisher-French.

A credit card acts as a revolving loan. It’s important to pay off the outstanding balance monthly. Keep limits low and use it as a transactional tool, rather than funding your lifestyle on credit. Use the Credit Card Debt Pay-off Calculator in excel to understand what you’ll really pay.


If you are in a situation where there is a big-ticket item you decide to purchase on your credit card and plan to pay it off over a few months, then you should rather use the budget facility – as this acts as a term loan rather than revolving credit.  You can select to pay off the item over three, six or twelve months, and the instalment is shown as a separate item on your credit card statement. Although the same interest rate will apply, if you meet those budget repayments, your purchase will be fully paid off over the period you selected.


It is better to have just one credit agreement that you maintain well, than having multiple accounts which you fail to repay.

Fisher-French says a number everyone needs to know is their credit score. Go and get your free credit report, which you can get from each bureau once a year, and if there are any errors, make sure to log a dispute. Paying off your credit card in full each month would indicate a healthy consumer.Having more than two retail or clothing accounts, more than four enquiries on your profile in a 12 month period (excluding your own, your employers or insurance companies) and maxing out available credit lines can have a negative effect on your score. 

When it comes to buying a house or car, a bank would consider both your affordability as well as your credit score. Your affordability will determine how much the bank will lend you, but your credit score determines your interest rate, or whether the bank will even lend to you at all. And remember, your payment history remains visible for 24 months.


Debt is expensive. Before you think of saving or investing, you should work at settling your debt. This will decrease your liabilities, moving you closer to a more positive net worth.

Step one to tackling your debt is to understand what you owe and the interest you’re paying. Itemise all your debts with the categories: Name, Type, Balance, Payment, Interest, Fees, Credit Insurance, End Date.  Fisher-French recommends the  Snowball approach to settle your debts: Take your smallest debt, pay it off, and close the credit facility so you are not back in the same situation next year.  Take the instalment you were paying to your first loan and add it to another debt repayment so that you pay off that debt sooner. Keep doing this until all your debts are paid off.


Kristia van Heerden, chief executive of Just One Lap and host of The Fat Wallet podcast, says people should apply the same discipline they would to a business plan to a financial plan for their personal lives and salary.   “You would not consider starting up a business without having a business plan demonstrating containment of expenses and the revenue levels needed to cover expenses, which produces a profit at the end. Think about your personal finances as a business.  You should have a plan with goals, strategy, projected earnings and expenses, and risk management, which includes including insurance and an emergency fund.” 


Van Heerden explains that the money you put towards your future (including your savings and debt repayment) each month, divided by your income, is your savings rate. You should aim to increase your savings rate each month.


Putting money away for a specific goal is Saving, putting your money to work with a long term view is investing. We need to save to get to the point of investing. As Fisher-French says, ‘If you don’t tell your money where to go, it will leave.’


As Mwandiambira says, money and time are friends.  If you save R3,000 per month with a 10% return from age 25, you would have R 15.9 million at age 65.  If you did the same from age 35, that number drops to R 5.9 million.


Tax free savings accounts are an important part of your long-term savings plan. You can only have one tax free savings account, but remember you can open them for your children from birth. You can invest R36,000 per annum and R500 000 per life in a tax free savings account.  Many tax-free savings accounts such as those offered by SatrixNow have no minimum deposit, so you can start with as little as R100. If you put R2 750 per month into a Tax Free Savings account, in 15 years you would have saved over R1.1 million tax free.


If you are being retrenched or forced to take unpaid leave due to the lockdown, Fisher-French points out you may be able to claim from your credit insurance policy. In the case of store cards it is often described as “balance protection”. Credit insurance could cover your payments, depending on the policy,if you are retrenched, experience a loss of income due to your employer requiring you to take unpaid leave or being unable to pay you, if you contract COVID-19 and are unable to work or if you are disabled or die.


When you take a payment holiday, your interest is capitalised. What that actually means is you’re going to be paying that loan off for more than a year longer and you’ll pay much more interest. If you have taken a payment holiday, you need to increase your repayment by 5% when you can to catch up, or increase it by 1% every year.  If you have a R1 million mortgage with 180 months left, how a 3-month payment holiday could end up costing you R106,000 in interest


Impulse buys can mean you waste a lot of money. Financial journalist Arabile Gumede says we should avoid this by unsubscribing from all marketing mailers and waiting for 24 hours before spending on big ticket items.


What is the best way to deal with compulsive emotional spending? Identify and treat any underlying psychological or emotional conditions such as depression – you may need to get professional help

Limit or destroy your credit cards, and consider handing over the management of your finances to someone else should that be necessary.


Saving in a stokvel can be a good solution, giving you group support and motivation as well as being able to use group solutions, according to Mwandiambira. But ensure that you know every person in the group and you have similar motivations.


If you are retrenched, Mwandiambira’s advice is to adjust your lifestyle, but don’t stop living. Good ways to save include reducing entertainment and luxury expenses, shopping smarter, reviewing your bank account and bank charges, disposing of assets you don’t need and considering downgrades on major expenses.


Four out of ten marriages end in divorce, and mostly the underlying driver is finance. Mwandiambira even recommends that young couples do an ITC check on each other!  Mapalo Makho recommended setting up a regular money date to discuss your financial plans, and to see a debt counsellor if necessary.


When dealing with family commitments or ‘black tax’, speakers suggested choosing wisely what you will support. Avoid getting into debt to help people, do what is reasonable and within your affordability.

You need to be realistic – and ask yourself if you are enabling a negative situation and creating dependencies.  Set clear boundaries – have a defined amount saved each month for the family and carry it over for emergency family access. It’s wise to have an expert shield – ‘My financial planner says….’  You can also try to give your family ways to create income.


As Dr Lesego Rametsi of Absa believes that in every challenge, lies an opportunity. “We have an opportunity to reset our lives and focus on all facets of health and wellbeing.  Make choices today that will improve your health – from a physical, mental and financial point of view.  Seek assistance if you’re battling – from employee assistance programmes or support organisations like the South African Depression and Anxiety Group. Remember it’s never too late to change your financial journey – make simple changes and look for the small savings.”


Visit www.waystosave.co.za to view content from the 2020 and 2021 #waystosave webinar series.

Saving in YOUR language with #waystosave this July Savings Month

The South African Savings Institute (SASI), with support from Absa and the IDC, will again focus on financial education throughout July Savings Month, bringing together financial experts to provide tangible insights on savings through the #waystosave financial literacy education initiative. SASI CEO Gerald Mwandiambira says that in 2021, the focus is on driving awareness around how savings knowledge must be understood and accessible in more South African languages.  The core #waystosave theme for 2021 is ‘Saving in YOUR language.’

The 2021 July Savings Month launch will take place at 11h00 on 30 June. Attended by media, government and financial industry leaders, the launch will spotlight South Africa’s savings behaviour.   “SASI remains steadfast in our mission to really transform savings behaviour in South Africa. The launch of July Savings Month 2021 will feature a host of leading voices in financial education. It will include a vibrant panel discussion, sparking a national conversation on how savings knowledge and financial literacy can be made more accessible to all,” says Mwandiambira. “To quote Nelson Mandela, if you talk to a man in a language he understands, that goes to his head. If you talk to him in his own language, that goes to his heart. Everyone can find ways to save in their own language.”

The July Savings Month launch will be followed by a series of in-depth webinars focused on students, stokvels, entrepreneurs and women, providing an opportunity for many to focus on their financial health. SASI has partnered with leading voices in financial literacy, offering savings insights and tools in various languages. “As we continue to battle the impact of the pandemic, it is even more critical for people to be money smart. But at times, savings and financial terms can seem like a foreign language,” says Mwandiambira. “#waystosave webinar speakers will address key issues targeted at specific audiences this year, including saving for students and young adults, bouncing back from retrenchment and saving through stokvels. There is something for everyone.”

Material will be released in Zulu, Sotho, Tswana, isiXhosa, Venda and Afrikaans. Those who participate in webinars could win cash to boost their savings.  

Thami Cele, Head of Saving and Investments at Everyday Banking, Absa Retail and Business Banking, says, “We are proud of what has been achieved during our four year partnership with SASI. We have supported vital financial literacy awareness and initiatives that help people to make good saving and investment decisions. Through #waystosave, many people will continue to be able to access the expertise and help they need, and now in several languages.”

2021 also marks the twentieth anniversary of SASI. The organisation continues to promote a savings culture and believes that through its efforts and campaigns, more South Africans know about the importance of saving. “The fact that July Savings Month, a SASI initiative, is now observed nationally is testament to the efforts of all the individuals who over the years have contributed to SASI’s success. We thank our long standing Chairperson Prem Govender and the SASI Board for seeing SASIs continued relevance in a digital age,” says Mwandiambira.

The SARB Financial Stability Review published on May 27 shows an overall increased rate of savings for households in recent quarters. As a ratio of household income, savings reached a decade high in the third quarter of 2020 (1.4%) before moderating to 0.5% in the fourth quarter (Figure 47).  At the end of 2021, Trading Economics projects South Africa’s Household Saving Ratio will stand at 0.6%.   

The SARB report further shows that low-interest rates have significantly improved the debt-service capacity of households. Household debt-to-disposable income increased in 2020, reaching 75.3% in the fourth quarter of 2020. Despite this, the cost of servicing debt for households fell to 7.7% of income at the end of 2020, down from 9.5% at the end of the previous year and the lowest level in more than 14 years.

SASI Chairperson Prem Govender says, “Improvements in the level of household net wealth are encouraging and it shows we can save when under pressure. However, South Africa still has one of the lowest Household Savings Ratios in the world. At SASI, we believe a strong focus on financial inclusion by improving financial literacy across the population is key to improving this ratio. In our increasingly tough economic environment we need to find ways to save and avoid the credit trap. As the economy gradually recovers, interest rates may rise over the short to medium term, which will make paying off debts more difficult. We need to avoid financial blind spots and drive a savings culture to break the cycle of inter-generational debt.”

Mwandiambira concludes, “Cultivating a culture of savings and making expert knowledge accessible to all remains the focus of SASI and our dedicated partners. Join us in July Savings Month and find #waystosave in YOUR language.”

Follow @waystosave on social media for more and visit www.waystosave.co.za to register.


Media contact:

Tamaryn Brown

Connect Media

084 3510560 / Tamaryn@connectmedia.co.za

Get money smart with #waystosave July Savings Month webinars

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.”