Spend wisely over Christmas period, urges SASI

Thursday, November 7, 2013

Pretoria - South Africans have been reminded to spend wisely over the approaching festive season and to set aside some money to meet obligations in the New Year.

The South African Savings Institute (SASI) has urged consumers in the country where household debt is at 75.4% of disposable income while household savings level remains at a mere 1.7% of GDP, to be cautious.

“South Africans spend more than they earn throughout the year, and this is compounded over the Festive Season when we are inundated by marketing and tempted by material goods we desire rather than need. People in all income brackets give in to debt just to make merry during the festive season,” said chairperson of SASI Prem Govender.

SASI is an independent non-profit organisation dedicated to developing a robust culture of saving in South Africa.

Govender said that while the Festive Season creates celebration pressure, this was soon followed by household financial obligations in the New Year, which people cannot avoid or delay such as equipping children for school, medical expenses and food costs.

Throughout the year, SASI  provides financial education  and relevant financial information to consumers. This year’s festive season campaign is running with the theme: "Spend Wisely, New Year Ahead."

According to Govender, the steep rise in the cost of living has left little to save in 2013 and this will continue in 2014.

“Responsible spending over the season– without incurring debt – is a far healthier option for households’ long-term financial wellbeing. We need to take heed in the message of the Finance Minister’s Medium Term Expenditure Framework, that without savings and investment, our aspirations will remain unrealised,” she said.

Govender points out that South African savings and investment rates, at below 20% of GDP have remained low, particularly in comparison to the BRICS, and the forecast for the next couple of years is not positive.

The savings institute offered a few tips to consumers including calling on consumers to resist sales and to make homemade Christmas gifts and taking holidays one can afford. It also called on consumers to pay cash for all purposes and to service debt and stick to payment terms thereof.

In October, Finance Minister Pravin Gordhan tabled the mini budget wherein it was projected that the country’s economy will grow by 1.4% to 3.5% over the next three years. - SAnews.gov.za