For almost two years *Julia cut back on small luxuries such as Friday nights out with friends, fast food, bimonthly trips to her parents in the Eastern Cape and cancelled her R800 cellphone contract to save for a car.
Julia, 32, is a single mom who manages a retail shop in Randburg, Johannesburg, earning about R16,000 a month.
She lives in a one-bedroom flat in the heart of the Randburg CBD with her four-year-old son.
As July, also known as the national savings month, kicks off, many South Africans find themselves deep in debt as prices of food and fuel continue to increase.
However, some people have managed to rise above the financial strain that many are experiencing and they had to make some hard decisions to realise their dreams.
Julia has been in the retail space for seven years after being unemployed for a long time.
She started out as a cashier with a salary of R6,000 and slowly worked her way up to be one of the managers at a grocery shop.
“When the Covid-19 pandemic came in 2020, I was already on my way to a debt-free life. I had settled my bank loan and my credit card. For the first time in my life I had some surplus money in my bank account and this sparked an idea of starting to save money.
“I had about R2,500 in my account and then I started putting between R800 and R1,000 away every month. I didn’t have a specific plan and sometimes I found myself dipping into my savings in hard months,” said Julia.
The idea of buying a car came one day when her Uber ride did not arrive as there were movement restrictions during hard lockdown and Julia was forced to walk 3km to work.
She started looking around for a second-hand car and she spotted a Kia i10 that was being sold for R70,000 at one of the dealerships in Randburg.
“I already had about R10,000 saved and I needed R60,000 more. I drew up a plan to raise the balance in about 15 months and that required me to put at least between R3,500 and R4,000 [aside every month] to achieve that.
“I had to cut out some of the luxuries I enjoyed, like going out. I also had to inform my parents in East London that I would not be coming home as often as I used to in order to save money for the car. They supported my decision and they knew the costs associated with going to them,” said Julia.
In the months that followed she would keep herself busy with work and looking after her child, and kept her distance from friends to avoid spending money unnecessarily.
Her groceries became basic and she learnt to look for bargains on food at various shops.
She also chose not to renew her cellphone contract and opted for prepaid.
“It was tough but I was disciplined. I had my family support. The reward of that came in December last year when I walked into that car dealership and bought the car cash. All the sweat and tears that I’ve put in towards my dream finally came to fruition. I’m debt-free and now I have started saving to renovate my parents’ house and I want to start the renovations in January,” said Julia.
According to the office of the credit ombudsman and MicroFinance SA, saving money is not only for those who have money and even those who are over-committed financially can save the little that they have.
“What it requires is for you to have a plan and most importantly, discipline. A lot of us do not save simply because we do not know why we are saving. Advancement in life requires planning and after planning comes implementation.
“And let us first establish that not all our life plans are the same as we are individuals with different needs, wants, pockets and situations, so it would not make sense for you to compare yourself to others when you start planning,” said Kabelo Teme from the office of the credit ombudsman.
She said it was important to draw up a budget by using your monthly bank statement to assess where your money usually goes.
From there you can decide which expenses to cut down on or to completely do away with. Sacrifices may need to be made to achieve the bigger goal.
“Many sources recommend saving 20% of your income every month. However, if saving 20% every month seems impossible, start saving with what you can afford. A little goes a long way.
“This is the beginning of you being honest with yourself because you should establish what your current financial situation is compared to where you want to be,” added Teme.
(* Not her real name)
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