Explore how National Savings Month encourages South Africans to build financial resilience amidst rising living costs and interest rates. Discover expert tips on saving effectively and maintaining financial health.
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July marks National Savings Month, an initiative led by the South African Savings Institute (SASI) to encourage healthier financial habits across the country. This year's campaign, however, arrives at a time when many South Africans are grappling with rising living costs, elevated borrowing costs and increasingly stretched household budgets.
With interest rates remaining high and inflation sitting near the upper end of the South African Reserve Bank's target range, many consumers are finding it difficult to set money aside. Yet financial experts argue that these conditions make saving more important than ever.
Rather than waiting for more favourable economic conditions, they say households should focus on building even modest financial reserves to help cushion the impact of unexpected expenses, further interest rate movements or rising costs.
More than 80% of middle-income South Africans do not have enough savings to cover even one week's worth of expenses. Financial planners say closing even part of that gap can significantly improve a household's ability to weather financial shocks without resorting to debt.
For many South Africans, buying a home represents the largest financial commitment they will ever make. In the current interest rate environment, however, affordability extends far beyond simply saving for a deposit.
With the repo rate at 7% and the prime lending rate at 10.5%, monthly bond repayments remain considerably higher than they were just two years ago, placing additional pressure on new homeowners.
Bradd Bendall, national head of Sales at BetterBond, says prospective buyers often focus heavily on accumulating a deposit but underestimate the importance of maintaining financial reserves after purchasing a property.
"We see so many prospective buyers save diligently for a deposit, then stretch themselves to the absolute limit of what they can afford or the maximum amount they qualify for if they have bond preapproval.
"The real discipline isn't just saving for the down payment - it's building a buffer that can absorb a rate increase or a few months of tighter cash flow after you've moved in. We always encourage buyers to stress-test their own budget at a higher rate than they're being offered, and to keep saving even once they've been approved. A home loan is a decades-long commitment; the saving habit that got you the deposit shouldn't stop the day you get the keys," says Bendall.
Bendall says existing homeowners can also benefit from making relatively small additional payments towards their bond whenever their finances allow.
Even an extra R200 a month on a R2 million home loan can make a meaningful difference over time. Over a 20-year repayment period at the current prime lending rate, that additional contribution would reduce total interest paid by just over R109 000 and shorten the repayment period by approximately seven months.
Saving consistently is only one part of preserving wealth. For South Africans planning offshore investments, paying international tuition fees, purchasing property abroad or diversifying assets internationally, currency fluctuations and transfer costs can significantly reduce the value of those savings.
Harry Scherzer, CEO of Future Forex, believes exchange rate awareness should form part of the broader national conversation around saving.
"People plan meticulously for how much they save in rand terms, but far less carefully for what that saving is actually worth when it needs to cross a border. The rand is considered one of the most volatile and reactive emerging market currencies in the world. If you're saving towards an international goal - whether that's funding an offshore investment, paying university fees, buying property abroad or building a global financial future - timing and structure matter. It's not about trying to predict the market; it's about making informed decisions that minimise unnecessary costs," he says.
Scherzer says the larger the transaction, the greater the impact that seemingly small differences in exchange rates and transfer fees can have.
"That’s why planning ahead and understanding your options can make a meaningful difference. Protecting your wealth isn't just about how much you save - it's also about reducing avoidable leakage when that money eventually moves across borders."
Financial experts acknowledge that households continue to face significant challenges, from higher fuel prices and elevated interest rates to the broader cost-of-living pressures affecting disposable income.
However, they argue that financial resilience is built through consistency rather than perfection.
Households that emerge from difficult economic periods in stronger financial positions are not necessarily those that saved the largest amounts, but those that maintained the habit of saving regularly, even if the amounts were modest.
As National Savings Month highlights the importance of financial preparedness, the message remains clear: build a financial buffer before it is needed, test personal budgets against tougher financial conditions rather than current affordability alone, and view saving as an essential part of long-term financial security rather than something left over after monthly expenses have been paid.
PERSONAL FINANCE