According to the Sanlam Benchmark Survey 2013, 56% of employed South Africans start to save at the age of 28 - an alarming statistic given that the recommended age to secure a nest egg and comfortable retirement is 23 years.
"Various factors influence and impact on the ability of an individual to save," says Lezanne Human, CEO of FNB Investment Products. "Fear of retirement and the ability to pay for children's education impact individuals over 30. Our research1 suggests that of those who start saving before they turn 30, 78% were taught and encouraged to do so by their parents."
Human explains that parents therefore play a critical role in teaching savings behaviour. Parents across the income spectrum save for their children and are responsible in doing so, however by not directly teaching children to save, they inadvertently do not foster the right savings habits in their children.
Seizing the opportunity to foster financial literacy through age-specific savings initiatives from a young age is crucial. To assist parents in this task, FNB has launched a fee-free savings account aimed to be a hands-on savings tool for parents with children from 5-12 years of age.
"Savings Month aims to bring about a savings mindset that will serve as a foundation for year-round savings," emphasises Human. "We encourage a more responsible savings culture amongst South Africans and it is our hope that parents will take the lead on this."
The first step in fostering a savings culture is by talking to children about savings and explaining the various concepts to them in order to make them less vulnerable to over-indebtedness as they grow older.
"The MyFirstSavings Account gives parents a powerful tool that will allow them to facilitate the process of depositing and withdrawing savings with their kids, making the concepts such as savings goals and delayed gratification tangible. The result will be financially savvy children who make discerning financial decisions, impacting on their lives forever," concludes Human.
For more information, go to www.fnb.co.za.
1Research conducted by FNB in 2013
