How to be a savvier saver and investor

National Savings Month is almost over. Some consumers learned how to save, but how many know how to be a savvier saver and investor?

“In essence, the intention is to foster a culture where South Africans can become more financially disciplined, leading to greater financial independence. To foster this culture, South Africans must learn that small actions in savings and investments can make a big difference in their lives.

“There are positive changes in the financial advice industry that consumers can capitalise on to do this,” Steven Amey, head of Intermediated distribution at Ashburton Investments, says. 

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Why healthier savings and investment habits are necessary

According to Eighty20 XDS Credit Stress Report 2025 for the first quarter of 2025, South Africans rely too much on debt.

Household debt reached an outstanding R2.56 trillion in the first quarter of 2025, up 2.1% from the previous quarter. “The most concerning aspect of this is the number of overdue loans. A staggering 34.8% of all loans are in arrears, the first time in two years this number increased,” Amey warns. 

“Consumers are battling to pay for rent, food and the basic necessities of life, yet we continue to spend on items that fall outside these categories, evidenced in the ‘Mass Credit Market’, representing the majority of the South African population.  

“Interestingly, approximately 325 000 people started using credit for the first time, in the form of retail loans. Overdue payments on credit cards in the mass credit market increased and 53% are in default, unable to pay an instalment. On average, South Africans spend close to 30% of their income on loans.”

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Statistics show we are not savvier savers

Amey points out that according to TransUnion’s South Africa Industry Insights Report for the first quarter, the growth in originations for new credit cards at 30.7% compared to the previous year far outstripped growth for other consumer credit products. He says this is cause for concern.

How do you change to build better savings habits? Amey says there are a number of good habits South Africans can embrace to improve your financial well-being, including:

Amey says to start with, you must separate your needs from your wants and rather use your hard-earned salary to pay for the essentials and save the rest or spoil yourself. ”We tend to overreach and spend more than we can afford. The statistics demonstrate this.

“Why extend yourself for short-term happiness when the inevitable of having to return your item or have it repossessed a few months later will cause greater embarrassment?”   

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Options to be savvier savers and investors are available

He says savings and investment options in South Africa are also evolving in South Africa. “While learning to save is critical, turning savings into long-term investments is where real wealth is built. To do this, you must be aware of changes in the financial industry that can be leveraged for your benefit. 

“The investment value chain dramatically improved for the regular retail investor over the past two decades. We moved from having an investment industry that largely sold financial solutions on the back of attractive commissions to one that has become well-regulated, respected and led by financial professionals that truly care about their clients’ financial well-being.”  

Amey says it is interesting to note that the financial services industry splintered into various advisory groups, each with their own unique value proposition. Many advisors elected to join networks of advisors, ordinarily supported by large established industry providers which assist advisors with regulatory compliance and enable them to offer sound financial advice and a host of additional ancillary services to enhance their value proposition to their clients.

In addition, large life and banking advisory divisions offer advisors many of the benefits of a network, with access to additional systems and services these large life and banking channels developed over decades.

And then there are the larger, more established independent financial advisory practices that retained their total independence, leveraging the resources they accumulated over years of entrepreneurial practice, Amey says. 

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How qualified financial advisers can help us be savvier savers and investors

“Today’s Qualified Independent Financial Advisors (IFAs) can render sound holistic financial advice and are regarded as the modern day ‘sherpa’. Their role is to prepare and help you navigate the financial complexities of life.

“Holistic financial planning is the epitome, where there is no longer a focus on a single need but a comprehensive analysis, incorporating all aspects of financial planning, from budgeting to cash-flow analysis, tax planning, investment planning and estate planning.

“Once all of this and more is compiled into an understandable and executable financial strategy, financial products, platforms and solutions can be recommended to enable your unique plan.” 

Amey also warns that while robo-advisor platforms are prevalent and tempting, they should be used only by more informed and astute investors. “The need for financial advice from a qualified financial advisor remains as strong as ever despite these latest developments.”

According to the March report of the Association for Savings and Investment South Africa (ASISA), there are a plethora of investment options available to investors. For instance, there are 1 884 unit trusts (100+ being passive or ‘Smart Beta Funds’), commodity funds, hedge funds, structured products, private equity, venture capital funds, fine art, actively managed certificates (AMCs) and more to select from, all adding to the financial complexity investors are facing.

“This is why it is critical to get advice from a qualified financial advisor.”  

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How discretionary fund managers can help us be better savers and investors

Amy points out that one very important development is the recent steep growth in discretionary fund managers (DFMs) in South Africa. “DFMs removed the burden of the advisor having to perform in-depth investment management due diligence and the complexity of having to compile detailed economic and asset management reports.

“Most DFMs have experienced teams, with sound investment processes and philosophies mastered over several years, for the benefit of the advisors they serve. In addition, many DFMs manage significant assets, which can enable them to negotiate reduced asset management fees on behalf of advisors.”

He says the investment portfolios they compile may be personalised for the needs of certain financial planning practices or more generally to serve broader financial advisor needs. These portfolios usually comprise large and boutique active asset managers, as well as passive and smart beta investment strategies to reduce overall investment portfolio costs. Advisors then invest their clients’ assets into these portfolios to achieve desired investment outcomes.”  

Amey says it is clear that many DFMs “add significant value, segregating roles and responsibilities to ensure the advisors they partner with can focus on what they do best”.  

“The savings and investment industry evolved significantly over the past two decades. If you want to change your financial fate you must tap into this opportunity. The way to do this is to partner with the highly skilled new generation of accredited financial advisors who lead from the front, acting as much needed financial sherpas for South Africans who want to build a better future.”