The tip comes from the South African Savings Institute (SASI) as Savings Month gets into its stride after a delay caused by the later stages of the FIFA World Cup and the nation's focus on a footballing agenda. Old Mutual, the financial services provider, is the lead sponsor of National Savings Month 2010.
SASI chief executive officer Elizabeth Lwanga-Nanziri pointed out: "Business knows it can't live beyond its means indefinitely and has made sensible cutbacks. Hard-pressed consumers should take note. To ensure you take part in the recovery you have to budget properly and manage your income better.
"Well-managed businesses today have more money on their balance sheets and have stopped spending money on projects that might not be necessary. Prudent consumers can do something similar.
"Recovery might mean you feel more secure in your job or might result in a new job after a period of unemployment, but that does not mean you should go back to the spending habits that characterised the pre-recession period. Save more, pay down debt and spend less on frivolous items ... that way you will sustain your personal recovery."
Recent statistics show that South Africa's household debt as a proportion of disposable income "is now at a staggering 80%, while savings by the same group stand at -0.4%".
"The numbers seem daunting and are difficult for many people to put into an everyday context, but the lessons can be simply applied by the average family," noted Lwanga-Nanziri. "SASI's simple five-point savings plan makes a good starting point and could take many families on the path to recovery."
SASI's basic plan entails ...
1. Have a dream: think about the future and what you want to achieve for yourself and your family
2. Write it down: make a note of your short-, medium- and long-term goals; set timeframes
3. Develop a savings plan: decide how much you need to set aside every week and month to reach your savings goals and start putting that money into appropriate savings products
4. Work on a household budget: make sure you know where your income goes, identify areas where you can cut expenses and outgoings; reorder priorities
5. Stick to your plan: make the savings as planned and put the money away; make saving a habit.
Elizabeth Lwanga-Nanziri added: "The theme of Savings Month 2010 is ‘Save for the Goal: The Path to Recovery'. Consumers should take the theme to heart. They'll find it life transforming - during the recovery and for many years after that.
• SASI launched Savings Month at a media function at the IDC auditorium in Sandton on July 20. The event included a keynote address from Ismail Momoniat, the DDG for Economic Policy & International Financial Relations and presentations from partners, sponsors and official bodies, including the Reserve Bank, the Education Department, the IDC, the Banking Association and leading institutions.