Behind South Africans' ability to save

Poverty should be considered when discussing South Africa’s saving culture.

- Penelope Gregoriou

The financial instructions emanating from the ivory towers of the financial industry of “save more” and “put money aside to invest” is, at best, oblivious to the financial reality that many South Africans live with every day. And at worst, ignorant.

Of course, this advice comes from the best intentions to ensure that people – from all classes – have a financial foundation that is strong enough to withstand any economic storm. That is, when the economic storm is felt by all classes.

The issue lies in misunderstanding the reality of when it is even possible to put money aside. What may seem like enabling financial conditions to save for you may not be enabling to someone else. The luxury of having enough money at the end of all your immediate, essential expenses is a luxury that the industry sometimes forgets not everyone has. They really don’t.

There are several reasons contributing to this persistent problem, including having the highest unemployment rate in the world, inaccessible and relevant financial literacy information, amongst some, but this article will focus on the most glaring problems: the number of people living in poverty and subsequently, the personal investment savings gap that many fall through.

The most unequal society