Employers urged to help workers save

People who save are happier and more productive at work, which is why employers have a vested interest in their financial stability.

This is according to South African Savings Institute (SASI) CEO Gerald Mwandiambira.

Saving money requires a behavioural change, explained Mwandiambira.

“As South Africans struggle under increasing financial pressure, a savings buffer becomes even more important. However, people are increasingly using credit to fund their basic needs, getting caught in a vicious spiral of debt from a young age,” he added.

Mwandiambira said it was important for those who are able to save to use all of the instruments available to improve their long-term financial sustainability.

For those employed at businesses, human resource personnel should guide you on how to save every month, he added.

“HR professionals should be educating employees to start building a savings buffer and recommending tweaks such as regularly reviewing and adjusting their pension fund contributions.

“Employers can more actively facilitate or automate the savings process for those with an income, such as garnish savings options, where money goes into tax-free savings accounts, and structuring 13th cheques as a savings tool.”

Saving tips from SASI

1. Set a target: It is important to set and write down important savings targets, such as an emergency fund, holiday fund and other targeted savings.

2. Automated savings: Debit orders to savings accounts enable automated saving.

3. Group savings: Start or join a stokvel or investment club with family and friends.

4. Savings buddy: Enable your partner or friend to be a savings buddy, who you meet with regularly to discuss your savings journey.

5. Baby gifts: You can seed a child’s future savings by requesting baby gifts of cash to deposit into a tax-free savings account (TFSA) or taking out a retirement annuity (RA) for a baby.

6. Children: Open TFSAs for all of your children, to maximise the benefit they receive from these accounts. Set up debit orders to contribute to these accounts as they grow up together and add cash gifts they receive on birthdays.You can encourage grandparents and other family members to also contribute regularly.

7. 13th cheque: Ask your employer's payroll to save for a 13th cheque, paid to you in December, by lowering your salary.This extra pay cheque will enable you to ride out the festive period and New Year expenses without major impact on your finances.

8. Financial wellness days: Ask your employer to give mandatory time off to review your finances with a financial planner once a year.

9. Domestic help: Set up a savings account or RA for your domestic helper. These important members of our families are often forgotten in future planning.

10. Retirement fund statement: By receiving your retirement fund statements monthly or quarterly, you can be encouraged to keep track of your savings.

11. Financial products and insurance: Shop around and use a financial institution that rewards consistent savers, either through a high savings interest rate or cash back for no claims.