Why saving feels harder than ever

For many middle-class South Africans, saving money has become one of the toughest financial goals to keep.

The year often starts with good intentions: a fresh budget, a new savings challenge, and promises to cut back. Popular ideas like the “R10 a day” challenge or the 52-week savings plan make saving feel manageable and even fun, but a few months into the year, reality often looks very different.

Higher living costs and debt repayments can quickly derail even the best savings plans. Many households that started strong in January find themselves wondering where the money went by June.

The good news? Saving is harder but it is not impossible. With the right habits and smarter tools, personal finance experts say households can still build financial security, even in a high-cost economy.

Where are the savings gremlins?

One of the biggest reasons South Africans struggle to save is simple: everyday living costs are rising faster than incomes.

According to the Competition Commission’s recently released Cost of Living Survey, the cost of essentials has increased sharply over time. Since 2020, electricity prices have risen by around 85 percent, while water costs have climbed close to 70 percent.

“Add higher fuel costs due to global uncertainty, and rising prices for food, healthcare, and education it’s no surprise that many households run out of money without any savings before the month ends,” says Siyabulela Makunga, spokesperson for the Competition Commission.

That pressure is being felt in many areas.

Medical costs continue to rise, and many families are paying more out of pocket for GP visits, medication and medical scheme contributions. Education is another major burden, with school fees, uniforms, transport and stationery costs increasing steadily. When essentials take up more of the monthly budget, saving is often the first thing to fall away.

Debt is eating into income

Another major obstacle is debt as many consumers rely on credit cards, personal loans, overdrafts and short-term borrowing to cover monthly expenses. While debt can offer temporary relief, it has to be repaid with interest which reduces future cash flow and makes saving even more difficult.

Data from debt counsellor DebtBusters shows consumers entering debt counselling in the last quarter of last year were spending an unsustainable portion of their income - - on average more than 70 percent of their take-home pay – to repay debt. That makes meeting living costs a struggle and a source of financial stress and makes savings almost impossible.

Most of these consumers were just surviving on short-term loans – a record 96 percent of them had expensive unsecured personal loans and 59 percent had payday loans, says Benay Sager, executive head of DebtBusters.

This cycle can be difficult to escape. The more income goes to repayments, the less room there is to build emergency savings or invest for the future.

There is some good news

Despite the pressure, many South Africans are taking steps to regain control. Research from Old Mutual shows four out of ten South Africans are saving for emergencies, while many are managing debt more actively and looking for ways to improve their finances.

“This shows that while life is still difficult for many, working South Africans are making tangible progress,” says Vuyokazi Mabude, Old Mutual’s Head of Knowledge and Insights, “People are taking control of their finances, seeking out additional income sources, managing debt more intentionally, and placing greater importance on saving.”

That shift matters. Even small financial improvements, repeated consistently, can create long-term stability.

The long-term savings gap

While more households are focusing on short-term savings, retirement planning remains a concern, with only 28 percent of households making retirement saving a priority, highlighting a major long-term gap. Many people understandably focus on immediate needs such as groceries, school fees and debt. But delaying retirement savings for too long can make it harder to catch up later.

Other reasons people stop saving

Saving is less about income and more about your behaviour, the recently released Franc Wealth Index Report shows. The report shows that the reason many South Africans fail to achieve financial wellbeing is because of critical gaps between their intentions and their behaviour. In particular, the report highlights our failure to set up emergency savings, prepare adequately for retirement and save consistently.

The report says financial resilience, which comes with having emergency savings, manageable debt, insurance cover and tracking expenses to a budget, is the weakest link in achieving financial wellbeing and an ability to save consistently to grow wealth.

How to build a savings habit

Here are things you can address to ensure you can keep up your good intentions to save:

Budget 

Without a plan, money disappears quickly. Households can fix this by getting into the habit of budgeting by tracking what is needed to cover monthly expenses and track where every rand goes.

Saving what is left over: While it may be true that for many households there is usually very little or nothing left, once you get into the habit of budgeting, try to save first, not last.

Automate your savings

If you set up a recurring debit order or automatic transfer to your savings account as soon as you are paid, you will have a simple way to save without relying on willpower.

Reduce debt

Debt repayments crowd out savings. Build a small emergency fund, then aggressively reduce expensive debt.

Provide for unexpected expenses

One emergency can undo months of progress. Aim for a starter emergency fund, even if it is only R5,000 to begin with.

Set clear goals
Saving without purpose or a clear goal is hard to sustain. Give your savings a name, such as your holiday fund, your home deposit, your school fees or your retirement fund, and make a plan – with a target and date - to reach your goal.

It's tough but possible

Saving in today’s economy is tough. There is no denying that. But it is still possible to make progress. You do not need to save huge amounts to move forward. What matters most is consistency. Small monthly contributions, smart use of tax-efficient products, and better money habits can create real financial security over time. Start small. Stay consistent. And let time do the heavy lifting.