"There’s no time like the present." This saying holds especially true when it comes to saving. With countless good reasons to start saving, it often feels like there's never a good time to actually do it. Life's unexpected challenges – the car breaking down, a child's illness, and many other unforeseen expenses – can easily derail even the best-laid plans. National Savings Month is the perfect opportunity to overcome these obstacles and make a commitment to your financial future.
South Africans are Struggling to Save
"Statistics show that South Africans are either not saving at all or delaying saving," explains Thian de Beer, CEO at Picsa. "Many households are saving less and favour spending more, often drowning in debt. This is especially true in low-income households, where rising transport and food costs make saving even more challenging."
In low income households, the picture looks bleak. Low income workers are especially hard-hit by rising transport and food costs. Additionally, psychological barriers such as the preference for immediate gratification over long-term benefits make saving even more challenging.
The promise of instant rewards is appealing and can often overshadow the importance of putting money aside for the future. To overcome these barriers, it's crucial to change your mindset and create actionable steps such as setting small, achievable savings goals and automating your savings to reduce the temptation to spend. By tackling both the economic and psychological challenges related to saving and spending, you can make meaningful progress toward a more stable financial future.
Why Employers Should Care
As an employer, when broaching the subject of saving with employees, the first question you’re probably asked is: “How can I start saving when I don’t earn enough?” This is a valid concern, especially in low income households where every rand is precious, and the rising costs of essentials like transport and food leave little room for savings.
"Addressing employees' financial health is crucial," says de Beer. "Financial stress can significantly impact overall well-being, productivity, and job satisfaction. By providing financial education and resources, employers can help employees manage their money more effectively, reduce stress, and improve their quality of life, leading to a more focused and engaged workforce."
Savings Advice for Your Employees
Encouraging savings, even in small amounts, can help employees build financial health, allowing them to handle unexpected expenses without crisis. "Caring about employees' financial health fosters a supportive work environment where they feel valued and empowered, benefiting both the individual and the business," says de Beer.
Here are some useful guidelines to help you steer the savings conversation in the right direction and give your employees the tools they need to start saving.
Start budgeting
A budget is simply a plan for how you are going to spend your money each month. By budgeting, you are telling your money where you want it to go. You’re giving your income an assignment. The chances of running out of money before the end of the month are far less with a budget in place. Likewise, being able to see where your money is going will help you identify potential areas where you’re wasting money and give you an opportunity to put it towards saving.
To empower employees in this process, employers can provide specific tools and resources. This can include financial literacy programs, workshops on budgeting and saving, as well as access to financial products offered by companies like Picsa. By offering these resources, employers not only help employees take control of their financial health but also demonstrate a commitment to their overall well-being.
Save for emergencies
Allocate a portion of your income to savings, no matter how small the amount. Financial services partners like Picsa allow clients to start saving from as little as R10 a month, making it easier to get into the habit of saving.
"Picsa's products are specifically designed to cater to the needs of low-income workers," says de Beer. "By allowing clients to start saving with as little as R10 a month, we remove the barrier of high initial deposits. Our value-for-money products, practical education, and meaningful rewards help clients understand the importance of saving and managing their finances effectively, empowering them to become financially healthy and independent."
Picsa’s value-for-money products, practical education, and meaningful rewards help clients understand the importance of saving and how to manage their finances effectively. This approach not only encourages the habit of saving but also empowers low income workers to become financially healthy and independent.
Avoid debt
Once a budget has been written up, it's important to stick to it. Committing to only spend your money according to the expenses set out in your monthly budget will help you stay out of debt. If you are currently in debt, try to pay back more than the minimum amount and don’t apply for more credit. Picsa assists with consolidating debt where possible and refers clients with too much debt to an independent debt counsellor.
Plant the seeds of responsible spending and saving habits by engaging in regular conversations with your employees about this crucial topic. Empowering your workforce to save for now and the future starts with the right support and resources. Partnering with Picsa can be the first step in this journey.
By partnering with Picsa, you can help reshape the financial trajectory of your employees. Picsa offers affordable financial products, practical education, and meaningful rewards, all designed to encourage positive behaviour change and improve financial health. Contact us to learn more about our simplified wealth-creation solutions.