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Send  Print  Share  RSS  Twitter  12 Nov 2010

Spend Wisely, New Year Ahead

 
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Johannesburg, Nov 12 (I-Net Bridge) - The South African Savings Institute (SASI) is urging consumers to spend wisely during this festive season.


This week it launched its annual festive season savings campaign called Spend Wisely, New Year Ahead together with key financial sector players such as the National Credit Regulator (NCR).


The recent financial crisis has left many countries, including South Africa, with declining savings and increasing unemployment levels.


These economies are now struggling to regain their pre-crisis growth rates, Prem Govender, Chairperson of SASI said at the launch of the campaign.


In South Africa, growth in real gross domestic product increased from -2.8% in the second quarter of 2009 to 3.2% in the third quarter of 2010 and gross domestic savings had marginally increased from 15.3% this time last year to 16.9% in the second quarter of 2010.


While there seems to be an increase in household savings from -0.4% in the second quarter of 2009 to 0.2% in the second quarter of 2010, this shift is a result of a decline in consumption due to reduced incomes of consumers , Govender said.


Debt also remains a deterrent to savings, with average household spending at 78.2% of their disposable income on debt repayment.


Govender added that this festive season SASI was urging consumers not get carried away with spending.


This can become a season of mindless spending that often gets out of control as South Africans get sucked into a spiral of spending like there is no tomorrow.


She said that the festive season saw the growth of compelling advertising campaigns.


In the process what gets forgotten is that there is life come January and with this life comes not just the normal monthly expenditure but annual recurring ones like school and university fees.


The organisation's best advice included the following tips:


If you did not save, don't borrow to spend;

If you did not budget for a festive season trip, stay at home;

Make the season's gifts instead of buying them;

Give your precious time to the needy as opposed to money during the season;

Invest in money boxes for children;

Avoid buying on impulse , resist those sale signs;

When you see sale, think SAVE;

Remember to budget for next year's school requirements such as fees, stationary and uniforms before you spend on the festive season.


Abel Tshimole. Manager: Registrations at the NCR told the campaign's launch that the number of consumers with impaired credit records continued to increase over the past quarter, reaching 8.59 million by June.


Each year, we tend to see the number of consumers falling behind on their debt repayments increase after the Christmas period.


Tshimole suggested saving throughout the year to fund year-end holidays and parties.


If you haven't saved, you shouldn't borrow rather pay off all your existing debt first and prioritize payments on your home loan.


He emphasized that consumers who ran into financial trouble should not bury their heads in the sand, hoping their problems would disappear.


Speak to your bank and try to negotiate a repayment schedule or talk to a debt counselor and see if they can help you.


Govender said that without a source of income, it was difficult to save.


Unemployment continues to be a looming threat to many salaried South Africans and in particular my thoughts go to the banking sector which faces massive cutbacks in staffing.


Sasi hoped that households and consumers would not get carried away with the tradition of unplanned spending which often left many desperate in the new year.


Sasi is asking South Africans to take a sober assessment of their expenditure during this festive season and reminds them that it is possible to enjoy the festive season without making financial decisions that will be regretted when faced with the financial realities of 2011.


I-Net Bridge, Tel: +27-11-280-0735,newsdesk@inet.co.za

Copyright 2010 I-Net Bridge. All righ


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