South Africans are being urged to start saving as spiralling prices and rising levels of debt weigh down the economy. Speaking on Salaamedia this week, Al-BarakahBank CEO Shabir Chohan said people should start saving, even if it is just R50 or R100 per month.
National Savings Month is an annual campaign that promotes the value of saving, as well as curbing levels of debt in the country. Chohan said that South Africa was not doing so well compared to other countries when it came to savings.
“Financial security does not happen overnight, it is a matter of each one of us taking small steps on a daily basis to make sure that we do secure our future,” he said.
Many people were in denial that they could save because of the state of the economy,and he urged people to get started straight away as it would help them to prepare for the future.
Chohan said that the first step was to set aside a small amount of money each month to go into savings. To do this, people needed to set up a budget and stick to it, making sure to distribute some money to their savings plan, even if it was just R100.
“You first have to pay yourself, that paying yourself goes straight into a savings account,” he said
Chohan said that the priority when starting to save should be an emergency fund. He said that people needed to make sure that they had something set aside in case of an emergency.
Unplanned life events such as job losses, medical expenses as well as an increase in the price of goods like fuel, could cause huge strain on families and household budgets if there were no savings to fall back on.
While budgeting and saving was extremely important, Chohan said that it was also vital that people cut back on discretionary spending.
He encouraged people to be careful with their money and advised them to separate between needs and wants and suggested that they should only take on debt where it was necessary.
Chohan said that people should be wary of investment opportunities, especially those that offered fantastically high returns.
People should make sure that they deal through accredited financial institutions and should not invest blindly based on the advice of friends and family members.
“There are some very, very intelligent people who have lost a lot of money because they are placing their faith in family members who are giving them financial advice,” he said.
Chohan said that people should start saving at an early age and that grandparents and parents could encourage their children and grandchildren to open savings accounts so that they could start saving early.
Thanks to technology, it was now possible to do this without having to go to a bank. He said that everyone should think about how they would want to leave their legacy to their children.
“The easiest way is to start a savings account and start saving in it today because with technology you don’t even have to go to a bank.”
With many South Africans struggling to cope with the pressures of the economy, National Savings Month is a timely reminder that it is never too late to start saving.
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Image via Maybank2u.
