Creating a South African savings culture

We don't save enough. It is as simple as that. Instead we prefer to spend, spend, spend. Often on credit. New research by the Old Mutual Savings Monitor shows that even less South African households are saving than ever before. This is scary news as savings are key to economic stability, and we may be out the recession but by only 0.9%. So what does Old Mutual say about who is saving?

 

• 52% of households are saving less
• 39% of households are saving the same
• Only 9% of households are saving more

 

There are a load of very interesting statistics that have come out of this study, one of the most telling ones is that we used to save more, way back in the eighties. The consumer boom of the last ten years was not a real boom but an artificial one fuelled by credit extension and cheap money. Now we have to pay the price. New data from the Reserve Bank shows that less credit is being extended. This may signal the return to sanity that has been long overdue.

There is some good news. The kids know better. Often the kids just think they know better but in this case it is true. For Generation Y, those born after 1980, saving is a much higher priority than the generations before them. No-one wants to live out the last years of their lives on handouts and pet food. Generation Y is much more worried about the future than previous generations, and they are acting accordingly. So plan for your retirement now and get a savings account or few.