The instability of the global economy, together with the low growth in the country and most recently, the petrol and VAT increases over the past two month are seeing South African consumers faced with the challenge of finding effective ways to manage their money and make it work even better for them.
One of the most important ways that you can manage your money is through consistent saving. This is key to financial success. By establishing a healthy approach to saving, there’s no need to rely on credit for everyday purchases.
Although credit is important to finance life’s major purchases such as a home or new car, unexpected events such as emergencies happen. A good savings pool which you can access easily comes in handy during times like these.
“It is very important to think about the long-term where a reserve fund of savings can help to lower debt levels, and position consumers in a stronger financial situation,” says Shival Somai, head of compliance at Experian South Africa.
The need to save has become an even more pressing discipline for households in South Africa and with July being national savings month, there is even more reason to start this. Every year, during July, the South African Savings Institute (SASI) conducts a national savings awareness campaign to raise awareness around key aspects of saving and the benefits of short, medium and long-term planning. The 2018 theme for Savings Month is “Employer Assisted Saving”.
Experian has released these tips to help people save:
* Budget and save – have a monthly budget and stick to it and remember to not spend more than you have. Save money in your savings account for emergencies. Ignore the temptation to dig into it when shopping, keep reminding yourself why you are doing this. Always use your debit card instead of a credit card for every day purchases. This way, you can’t spend more than what you actually have.
* Be honest with what you have – never buy on credit without knowing if you can afford the repayments. When applying for credit ask the credit provider to show you how much you will pay every month based on how much you spend. Then calculate how much you can afford to spend every month and do not exceed it.
* Keep check of your credit report – it is important to regularly check your credit report using services such as Experian’s CreditExpert, which allows you to ensure information is up-to-date and accurate. This will help you to protect your credit reputation, which is beneficial in the long-run when you are ready to apply for credit for purchases as substantial as a home loan. Your credit report is also a way to identify any unusual activity on your existing credit accounts, thus protecting you against fraud such as identity theft.
* Pay your accounts in full and on time – don’t let your account to fall into arrears. Pay the full instalment amount owed. Try not to fall two or three months into arrears as credit lenders are less likely to give you credit. This will also save you from the added cost of interest.
“Many are aware that tough times are ongoing, but saving and keeping a close watch over credit usage will help you to stretch your money and live well,” ends Somai.