The South African Savings Institute (SASI) has issued a warning to consumers ahead of Black Friday and Cyber Monday against reckless spending and buying any items that they do not absolutely need as South Africa faces major economic and political crossroads. The mining sector, Standard Bank, SABC and other workforces are being affected by significant job losses in addition to the 27.5% rising unemployment rate. “It would be wise under these circumstances to save as much as possible in a volatile environment. Do not spend money you don’t have on things you really don’t need,” cautions Prem Govender, Chairperson of SASI.
“If you qualify for an end of year bonus, it would be better to pay off your debts and to invest the remainder than to squander it on TVs, designer outfits or a deposit on a new car.”
Know your interest rate
SASI’s annual festive season savings campaign kicks off and focuses on being aware of the interest rate you are getting on your savings. SASI has partnered with MyTreasury.co.za encouraging consumers to save money more wisely, simply by knowing what interest rates you are getting.
Whether you have a few hundred rand to put away each month or millions you are waiting to invest, a high-interest bank account is an important savings product that offers safe, consistent and reliable returns. Over 16 million South Africans have cash in savings accounts, but the South African Reserve Bank statistics show that about 40% of this money sits in low interest accounts or attracts no interest at all.
MyTreasury.co.za is an independent price comparison website that offers a fast way to find the best savings account for the highest interest rates. Once you click on the best option for you, the bank will call you back to tell you more about it and can help you open the account.
Govender explains, “One of the easiest ways to start saving more or paying less is by knowing your interest rate. By switching services or selecting wisely, you can either save more today or grow your wealth quicker.”
So with such large gains from switching to higher interest rates, why do so many South Africans continue to keep their money in low or no paying accounts? Warren Kopelowitz, CEO of MyTreasury.co.za explains, “The savings market is opaque and complex so without using MyTreasury.co.za, it is virtually impossible to select the highest paying savings account that best matches your requirements. It is difficult enough to find bank rate data without comparing different rates across multiple banks and products.”
Consider savings groups
As the nation celebrates another year, SASI Acting CEO Gerald Mwandiambira said, “The need to collectively pool resources and save is now more important than ever. Families should consider savings groups and stokvels ahead of 2019. Even stokvels should shop for the account with the highest interest rate.”
SASI continues to advocate for saving but the reality for most South Africans is that surviving turbulent economic times is top priority. With this in mind, SASI’s theme for 2019 is “Back to Basics” encouraging consumers to budget for all expenses and focus on needs versus wants.
Mwandiambira adds, “Use SASI’s hash tag #CelebrateSavers, if you manage to save and then share with others to encourage them.”
The Institute, with the provincial offices of Consumer Protection and the Financial Planning Institute will spend the month-long campaign conducting consumer education workshops in key strategic areas around the country. The institute will also visit various shopping malls as part of this year’s festive season campaign.
Tips to survive the festive season
1. Resist sale, think save! Clearly distinguish between needs and wants.
2. Make your own Christmas gifts and only take holidays you can afford.
3. Have a clear budget for your requirements in the New Year.
4. Use free online tools to track your spending and debt and know where every cent of your income goes.
5. Pay cash and don’t be trapped by easy credit.
6. If you are looking to save, find the best interest rate on a website like www.MyTreasury.co.za
7. Visualise what you want to save for and start saving more. Save your end of year bonus and watch it multiply.
8. Service your debt and stick to the payment terms. If you cannot service your monthly debts discuss your situation with your credit providers before it is too late. Consumers can seek assistance from a registered debt counsellor by contacting the NCR on 0860 627627.