While the latest Savings Monitor report from Old Mutual indicates that more and more people in South Africa are waking up to the importance of avoiding debt, the savings attitude of South Africans remains negative and not enough people are saving money.
This is according to Natasja Hart, wealth manager at GCI Wealth. Hart reveals that more than 40% of respondents from the Saving Monitor said they have no form of formal retirement savings at all.
“There are many factors that drive these poor saving habits, but I believe that the underlying reason is that too many people see saving as something negative, something that reduces the amount of money they have to spend on fun things. However, approached in the right spirit, experience proves that saving can be rewarding, both in the short and long term,” Hart says.
She also explains that for many people understanding the long-term benefits of saving is easier than understanding the short-term benefits. She believes that the phenomenon of instant gratification, which if often accompanied by guilt and cognitive dissonance has a part in the poor saving culture our country.
Hart recommends that when drawing up a budget for the month, people should set aside money they need for the month, but also for things they may need in the future. This method will not only lessen the amount of guilty purchases people make, but will also promote saving as a form of delayed but planned spending, which is always beneficial to one’s future.
“In short, we need to learn to see saving as something we are doing for ourselves, not some sort of grudge ‘purchase’. At the same time, having a solid savings plan changes the dynamic of enjoyment in the present, because what you spend now will be pure pleasure, with nothing to pay in the future.”
Hart holds a Bachelor of Commerce from the University of Pretoria as well as two advanced postgraduate financial planning diplomas from the University of the Free State. With more than 17 years in the industry, she has established herself as a leader in financial planning.
In 2010, she was only the second woman to receive the prestigious Financial Planner of the Year award from the Financial Planning Institute. She now acts as a judge for the awards.
If you would like to hear more of Hart’s insights as well as other industry leaders in the financial planning sector, be sure to visit the Brentwood Lodge in Deneysville on Friday, 11 August 2017 from 15:00 –17:00.
The event will be hosted by GCI Wealth as it forms part of the company’s annual wealth tour, which sets to inform and educate South Africans on developments in the financial sector.
Article Source: Bloemfontein Courant