There is no escaping it: South Africans are terrible savers. We lag considerably behind other emerging countries when it comes to investments and savings. The World Economic Forum puts our savings at a mere 15.4%, whilst countries like India and China sit at 32% and 51% respectively.
There isn’t a culture of saving in South Africa, and very few people put money aside every month. This means that most people will never have enough money for a comfortable retirement. For many people the loss of a salary check for just a few months would spell financial disaster.
Why are South Africans so poor at saving?
The first reason why South Africans are poor savers is because there is a lack of financial literacy. Many people do not understand even the basic principles of finance. Whilst regulation has been implemented to protect consumers, many still fall prey to reckless lending practices. It is easy to get credit in South Africa. And often the consumer does not have the required financial literacy or discipline and becomes over indebted.
Another reason is because of the rising cost of living in South Africa. With continual increases in basic necessities like food, transport and electricity it is hard for the average South African to make end meets. Saving is not a possibility and not even a consideration.
Much is also said about the “sandwich generation” in South Africa. This is the generation of adults that are looking after their elderly parents and also have children staying at home, dependent on them. Recent statistics show children are leaving home later than ever and 45% of adults between the ages of 25 and 34 still live at home. In these circumstances it is very hard to save.
What should you do if you are over-indebted?
In South Africa it is easy to become over indebted. A health emergency, losing your job, and even the increase in the cost of living can all result in a situation where you can no longer meet your financial commitments. There is help available for you to get back on your feet. If you are over indebted contact One Debt to discuss Debt Review.