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Financial education initiative to help manage your finances.
With July being Savings Month, South Africans are encouraged to think about how much they save and to re-evaluate their long-term financial goals. Scare tactics seldom work but the truth is that without adequate savings your future will look bleak, says John Manyike, head of Financial Education at Old Mutual.
Avoiding being a payday millionaire is one way to get through the month with cash to spare. Most of us are guilty of this
The Old Mutual’s annual Savings and Investment Monitor, which tracks the shifts in the financial attitudes and behaviour of South Africa’s working metropolitan population, shows that 49% of the country’s population is saving less than they were a year ago.
The 2016 study also reveals that two out of three South Africans are feeling serious financial stress and that their debt levels are increasing. Furthermore, the newly published report saw the number of people dependent on their children increase to 45% from 26% in 2010. “These statistics bring home the fact that without adequate long-term savings, you could be forced to depend on the state or your children, or both, to look after you when you retire,” says Manyike.
In South Africa, people are living longer and every year it becomes increasingly expensive to live, a fact that is contributing to the incidence of people working beyond the traditional retirement age of 65.
What’s more, without adequate savings, it’s easy to fall into debt when an unplanned emergency strikes, and it makes you more vulnerable to scamsters who promise quick financial success and outrageously high returns that are not sustainable.
Manyike adds that a lack of savings will have a direct result on not only your own life, but the lives of your children too. “If you have failed to save for your children’s education, this could compromise their career prospects and limit their chances of becoming financially independent. This means they would most likely continue to remain your dependents even in their late adulthood.
“However if you have planned ahead and applied basic savings principles, you can accumulate enough savings, with the help of compound interest, to support your children’s studies adequately.”
So the good news is that it is possible to avoid these financial calamities. Changing bad financial habits is possible, and there are ways to break bad old habits that get in the way of financial stability.
Although there are aspects of our personal finances that are beyond our control, there are aspects that can be dramatically improved, and it starts with our attitude and behaviour. Self-discipline is essential.
Equally important is to find the information and the tools that enable you to make that change. Consult your financial adviser, make use of free online workshops available such as the On the Money workshops, which are also offered countrywide face-to-face to interested groups.