by Kathryn Main
South Africa is a buy-now, pay-later society. The effects on young people’s financial literacy are thus characterized by the same behaviour patterns as parents and society. These are high credit and high consumer behaviour with very little savings, and in turn high social risk behaviour. Money Savvy is working to change this disastrous pattern.
The last year has been really challenging not just for me but for many people across the globe. For the first time in my lifetime we have experienced a global epidemic. We heard and still hear statements like “no work no pay”, “salary cuts”, “closure of many small businesses”, “this virus is here to stay”.
None of us could have predicted this global epidemic, but we can plan for potential financial threats in our own lives. If we can recognize what some of those threats could be, we can mitigate the risk from affecting our financial future if we plan correctly. Insurance and savings have protected me and my family from the global threat we are facing. For me like most small businesses in South Africa when we went into our first hard lock down all my work came to a grinding halt and all my live workshops were cancelled with immediate effect.
The impact on my finances was dire. I had 3 months where Money Savvy made no money at all. Luckily my advertising agency picked up the slack 4 months later. If I did not have savings in the bank I would have been evicted and probably lost my car. I did have savings and managed to make it through the tough months without too much stress.
I can not stress enough the importance of having an emergency savings account. My suggestion would be that you have 12 months’ worth of living expenses saved up. You never know what life is going to throw at you, but you can plan for the worst and hope for the best.
Here are some tips on starting your emergency saving fund:
It’s never too late to start saving
It’s never too little. Start with what you have
Set up a saving pocket and automatically transfer money into that account when you get paid monthly
Pay yourself first before paying bills and paying off debt
Add saving into your budget each month
Try and save a minimum of 10% of your total earnings
Track your spending. Instead of buying coffee on the way to work, make coffee and take that R20 you would spend each day and put it into your savings account. If you did that for a whole year you would have managed to save R5400. Ask yourself….is that coffee worth it?
Money Savvy Kids is revolutionising the way financial knowledge is disseminated to younger generations of South Africans. It infuses our clients with the problem-solving and critical thinking skills they need to make financial decisions now and, in the future, using the analytical skills they learn through the program.
Kathryn@moneysavvykids.co.za
If you are looking for words to describe Kathryn Main, CEO the Money Savvy brands, quirky, determined, visionary and masterful are just some that spring to mind. Kathryn is an author and award winning businesswoman and has won awards for her advertising agency as well as Money Savvy Kids. Kathryn has a passion to change the face of education on the African continent through financial literacy education and training. The Money Savvy brands are revolutionizing the way financial knowledge is disseminated to younger generations of South Africans. Money Savvy Kids + Teens promotes in youth the skills, knowledge attitudes and behaviors required to be financially independent.
More articles by Kathryn