National Savings Month, observed in July, is an initiative by the South African Savings Institute (SASI) aimed at promoting healthier financial habits across the country. However, this campaign takes place during a period when many South Africans are facing rising costs of living, increased borrowing expenses, and significant strain on household budgets.
The Financial Necessity of Saving
As interest rates remain high and inflation is near the upper end of the target range set by the South African Reserve Bank, many consumers find it difficult to put money aside. Nevertheless, financial experts argue that saving becomes even more crucial under such conditions. They advise households to focus on building even modest financial reserves to cushion against unexpected expenses, further interest rate changes, or price increases, rather than waiting for more favorable economic conditions.
Over 80% of middle-income South Africans lack sufficient savings to cover expenses for even one week. Financial planners note that closing even part of this gap can significantly improve a household's ability to withstand financial shocks without resorting to debt.
Beyond the Down Payment
For many South Africans, purchasing a home represents the largest financial commitment. However, in the current interest rate environment, housing affordability extends far beyond simply accumulating a down payment. With a repo rate of 7% and a prime lending rate of 10.5%, monthly mortgage payments remain significantly higher than two years ago, placing additional pressure on new homeowners.
Brett Bendal, National Head of Sales at BetterBond, points out that prospective buyers often focus too heavily on saving for a deposit while underestimating the importance of maintaining financial reserves after acquiring property. He notes: 'We see many potential buyers diligently saving for a deposit, and then pushing themselves to the absolute limit of what they can afford or the maximum amount they qualify for in pre-approval.'
According to Bendal, true discipline lies not only in saving for the down payment but also in creating a buffer capable of absorbing a rate hike or several months of tighter cash flow after moving in. He strongly recommends that buyers stress-test their budget at a higher rate than offered and continue saving even after receiving approval. Since a mortgage is a decades-long commitment, the habit of saving that helped secure the deposit should not cease on the day the keys are received.
Bendal also reports that existing homeowners can benefit from making relatively small extra mortgage payments whenever their finances allow. Even an extra payment of R200 per month on a R2 million mortgage can have a significant effect over time. At a 20-year term at the current prime lending rate, this extra contribution will reduce the total interest paid by over R109,000 and shorten the repayment period by approximately seven months.
Protecting Savings from Currency Risks
Consistent saving is only part of capital preservation. For South Africans planning overseas investments, paying international tuition fees, buying foreign property, or diversifying assets internationally, currency fluctuations and transfer fees can significantly erode the value of these savings. Harry Scherzer, CEO of Future Forex, believes that exchange rate awareness should become part of a broader national discussion on savings.
He emphasizes: 'People meticulously plan how much they will save in Rand, but far fewer carefully consider what actual value that saving will hold when it needs to cross borders. The Rand is considered one of the most volatile and reactive currencies in the world's emerging markets. If you are saving for an international goal—whether funding overseas investments, paying university fees, buying property abroad, or building a global financial future—time and structure matter. It is not about trying to predict the market, but about making informed decisions that minimize unnecessary costs.'
Scherzer adds that the larger the transaction, the greater the impact seemingly minor differences in exchange rates and transfer fees can have. 'This is why advance planning and understanding your options can be crucial. Protecting your capital depends not only on how much you save, but on minimizing preventable losses when that money eventually moves across borders.'
Small Habits Yield Long-Term Benefits
Financial experts acknowledge that households continue to face significant challenges, including rising fuel prices, increased interest rates, and general cost-of-living pressures affecting disposable income. However, they argue that financial resilience is built through consistency, not perfection.
Households that emerge from difficult economic periods in a stronger financial position are not necessarily those who accumulated the largest sums, but those who maintained the habit of regularly setting aside funds, even if the amounts were modest. As National Savings Month highlights, the importance of financial preparedness remains clear: one should build a financial cushion before it is needed, test personal budgets under harsher financial conditions, not just current availability, and view saving as an integral part of long-term financial security, not as what is left over after monthly expenses are paid.
