The theme for the 2010 Savings Month could hardly be more topical – goals and recovery.
Prem Govender, chairperson of the South African Savings Institute (SASI), announced the theme – ‘Save for the Goal: The Path to Recovery’ – at the Sandton launch event (on Tuesday, July 20) to usher in Savings Month.
The annual awareness-raising initiative usually kicks off on July 1, but was delayed this year because of the clash with the later stages of the FIFA World Cup. Old Mutual, the financial services provider, is the lead sponsor of National Savings Month 2010.
The nation’s love affair with soccer was integrated into the theme while the recovery element was added as this is sure to be a recurring topic in statements by government and business, said Govender.
Since SASI’s inception in 2001, the organisation’s advice on personal savings has consistently been put into the context of long-term goals, she noted.
“In World Cup year it was therefore natural for us to emphasise the ‘goal’ terminology,” said Govender. “The ‘path to recovery’ aspect gives Savings Month enduring relevance as recovery is the focus of businesses and individuals the world over following the recent global economic melt-down, and will be on everyone’s mind for the rest of the year and well into 2011.
“In our engagement with policymakers, regulators, communities, learners, entrepreneurs, families and individuals we will emphasise that it’s not only business and government that have to work towards the recovery. All South Africans have a role to play. We all have a responsibility to engage in planning and mitigate unpleasant changes in business cycles.”
One of the objectives of Savings Month is to strengthen the spirit of partnership and collaboration in taking the message of saving to the broader public.
SASI believes key issues affecting family budgets and prospects for the rest of the year are likely to be:
- The continuing scourge of unemployment and retrenchment.
- The need for up-skilling and re-training if people are to prepare themselves for work as economic growth returns.
- The need for lifestyle adjustments by previous high-flyers and others who fell victim to the recession.
The SASI chairperson revealed that South Africa’s household debt as a proportion of disposable income “is now at a staggering 80%, while savings by the same group stand at -0.4%”.
She noted: “With governments the world over pursuing contractionary fiscal policies, we have to think about where the rescue will come from for our long-term wellbeing. With current employee retirement contributions at best minimal, the need to plan and save for retirement is even greater today, and demands that we pay off debt as quickly as we can in the short term to enable us to concentrate on accumulating retirement capital for the long term.”
Though quantifiable indicators had shown improvement, SASI was concerned about low levels of financial literacy. This remained a major drawback; in South Africa and worldwide. The institute would continue to strive for improvements in financial literacy at all levels.
Govender added: “Many people have to rethink their lifestyle and recalibrate their goals. They can launch themselves on their personal path to recovery as the business cycle turns, but to do it they may need to acquire new skills.
“Of course, some small business people and entrepreneurs have done well from the World Cup. They also have to map out a new path. Do they spend their profits, do they save or do they invest in the development of their business?
“Big issues have to be addressed in the post-recession and post-World Cup period. Our theme helps South Africans crystallise the challenge.”
SASI launched Savings Month at a media function at the IDC auditorium in Sandton. The event included a keynote address from the Ministry of Finance’s Deputy Director-General Ismail Momoniat and presentations from development partners, sponsors and official bodies, including the Reserve Bank, the Education Department, the IDC, the Banking Association and leading financial institutions as well as soccer ambassadors/icons.