FSSC 2008 Campaign

Joint Campaign launched to encourage responsible spending during the Festive Season

Get started on your 2009 resolutions by resolving to consistently save more throughout the year – starting this festive season.

From 11 November 2008, the South African Savings Institute (SASI) will launch its Annual Savings Campaign. As an extension of July’s National Savings Month, it partners with a number of key players for the November and December campaign:

  • Department of Trade and Industry (the dti),
  • Financial Services Board (FSB),
  • National Credit Regulator (NCR),
  • Council for Medical Schemes, and
  • Nine provincial offices of Consumer Affairs.

This campaign encourages consumers from all walks of life to spend responsibly during the festive season and, at the same time, reminding them of the importance to save for their future.

“The DTI wants to make sure that South Africans are armed with all information they need in order to make informed decisions. This includes spending wisely over the festive season and being careful about borrowing money,” says Karin Coode, director for Consumer Affairs at the DTI.

“We believe that when South Africans make their new year’s resolutions it should be for a fresh start and the start of a savings plan,” says Nomsa Motshegare, COO of the National Credit Regulator, a partner to the campaign, and a board member of SASI.

Mmakgoshi Phetla-Lekhethe, CEO of SASI explained that the board and the executive members of SASI are proud to be partners in this important initiative. The campaign furthers the organisation’s role in the development and strengthening of savings networks. This also ensures that each organisation’s resources are put to optimal use and ensure the effectiveness of these interventions.

Why Festive campaign
“While we understand the importance of this period to individuals, families and households, the festive season often leads to unnecessary expenditure. Such consumption patterns often lead to high levels of indebtedness. It is this tendency to spend that the joint partners of this campaign would like to address. The message that we are sending out to the public is that as we journey into this season let us be conscious of the temptations that come with it and spend responsibly.” Phetla-Lekhete adds.

SASI has identified the theme of “Slowdown, New Year Ahead” for their campaign and hopes it helps consumers to manage their temptation to overspend during this festive season. Consumers need to be conscious of the need to save and ignore the SALE signs as New Year obligations include school fees for many parents.

Challenge of the financial crisis
SASI has taken full cognisance of the impact of the global financial crisis on the savings ability and sustenance of people’s welfare. Over the past few months, more than a number of impactful increases have been put in place:

  1. Interests rates have increased to 12%;
  2. Inflation has peaked at 13.40%
  3. The stock market has decline by 30.13% year on year
  4. nemployment has recorded 23.20%, in the last report, of the 3rd quarter 2008;
  5. The economy has slowed to 3.30% in 2008 and is expected to slow to 3% in 2009.

All these factors, both individually and combined, militate against people’s ability and willingness to save. For those who have investments in equities, in particular for their retirement, their assets have shrunk by 30.13%. Those who have been contemplating starting to save will be discouraged by this negative performance as well as rising cost of living.

The concern about household preparedness for crisis is made acute by the savings performance of households, which have declined consistently from a saving rate of 2.7% in 2001 to a negative saving rate of -0.5% in the second quarter of 2008. Clearly this is picture is unsustainable.

However, what is clear from all these negative indicators is that, those people who had put money aside are well prepared to rise above the current economic storm. Those who have not saved sufficiently are really feeling the pinch – an important lesson for all of us. For consumers to avoid being unprepared for future eventualities, they need to instigate a savings plan now.

A lesson that we have learnt as an economy over the years is that difficult times will always repeat themselves. In that regard, we cannot be comforted by the factors that this is passing. Therefore, the savings message that SASI has been reinforcing over the years remains true today, especially during this economic downturn.

Government has provided sound leadership for South Africans. In predicting the turn of fortunes it followed the route of saving by running fiscal surpluses over the past three years. The deficit of 1.6% projected for 2009/10 could have been much wider had it not been for the prudence taken three years ago. This has put government and the country as a whole in very good stead.

“The lesson of savings needs to be carried into each and every South African household to guide consumer behaviour during the festive season,”Phetla-Lekhethe concludes.

This year’s joint theme is “Don’t compromise, be money wise”.

A number of activities are planned to be rolled out across the country. Volunteers from each of the joint partners will undertake various outreach events that will see them interact with consumers across the country. The schedule of events has been posted on the websites of the joint partners. SASI’s flagship project for this year will be the distribution of money boxes through partners and schools across the country. This will be a campaign that will grow into the coming years.

Tips for saving
For the festive season, we want to give consumers the following tips:

  • As you observe the large and attractive SALE signs, think about the need to SAVE at the same time
  • Make sure that you have budgeted well for your expenditure. What is unaffordable is not to be bought. You will not know until you have a budget
  • Instead of buying presents, make them. It puts more heart into the spirit of giving
  • Buy no-name brands instead of brand names, the quality is not very different and often the same. These are often cheaper
  • As you spend during this period, think carefully about your financial obligations for the New Year, such as school fees
  • Start saving now for next year’s Festive Season then you will not have to buy on credit, it will work out cheaper and will empower you with bargaining power
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