fbpx

Financial Management: Principles from South African Heritage

Jan 4, 2024 | Money

When millions of South Africa celebrate their cultural wealth, including the diversity of our beliefs, traditions, and yes, the food. Perhaps especially the food. What we should also include as part of our review of this rich heritage we’re privileged to draw on, are the many financial management principles, saving strategies, and investing wisdoms that can be learned from our historically deep melting pot.  

While we’re reflecting on and celebrating the past and how it has aided in who we are today and individuals and a country, let’s explore some of these principles and strategies that can help more South Africans manage their finances, save money, and invest wisely. 

The Sharing Power Of Ubuntu 

Ubuntu, the Nguni Bantu term for ‘humanity,’ is arguably a philosophy that emphasises the interconnectedness of all people and the importance of community. In the context of financial management, Ubuntu can be seen as a reminder that our financial decisions have an impact not only on ourselves but also on our families and communities. 

One way to apply the principle of Ubuntu to financial management is to prioritise saving and investing for the long term. By doing so, we can ensure that we’re not only securing our own financial future but also contributing to the well-being of our families and communities. 

Essentially, we need to share openly with the family about financial responsibilities, budgeting, savings, and debt. We should discuss these factors, make decisions together, and share our experience with money in order to better plan for your and your family’s financial future. 

Historic Ingenuity Going Back To Stokvels 

South Africans have a long history of ingenuity and resourcefulness, which has been demonstrated in many areas, including finance. One example of this is the concept of stokvels.  

Stokvels are informal savings clubs that have been used by South Africans for generations. These ‘clubs’ are typically formed by a group of people who contribute a fixed amount of money to a common pool on a regular basis. The money is then used to provide loans or to make investments that benefit the group as a whole. Stokvels are a great example of how ingenuity and resourcefulness can be used to create financial opportunities and build wealth. 

The Homegrown Entrepreneurial Approach 

As a nation, we can boast of our vibrant entrepreneurial culture going back years and years, across all cultures that make up our beautiful rainbow. It’s really no wonder that SMEs constitute more than 90% of all formal businesses in the country, employing 50-60% of the workforce, and tribute to 34% of the GDP.  

This culture of entrepreneurship can provide valuable lessons for financial management, including the importance of taking calculated risks, being innovative, and being willing to adapt to changing circumstances. 

Clearly SMEs have staying power, not to mention tremendous potential for growth. Either this is cause for inspiration to get you started on your own empire in the making, or you could invest in small businesses or startups through crowdfunding platforms or by investing in venture capital funds that focus on early-stage companies. 

Resilience Has Made Us Adaptive 

We’re no stranger to overcoming large scale challenges, including economic instability, political turmoil, and social inequality. Of course, there’s also the Covid-19 pandemic that we weathered. And yet, in spite of these challenges, South Africans have shown remarkable resilience and have been able to adapt to changing circumstances. 

If we regard this resilience as a financial principle, we can be better prepared for unexpected events. This can be done by building an emergency fund that can be used to cover unexpected expenses or to provide a safety net in the event of a job loss or other financial setback. 

Feeling informed?  

There’s no doubt that our rich cultural heritage provides many valuable lessons that we can draw on and apply to how we approach and manage our finances more effectively. 

The good news is that it’s never too late to start taking control of your money, and there are many resources available to help you get started. You can start by checking financial status by getting a free credit report emailed to you instantly.

Don’t forget that AA Inform is also home to a range of useful tools and resources, including our Monthly Personal Budget Calculator, free property valuation reports, multiple car and home insurance quotes through the AA Insurance Supermarket, and much more. 

Share This

Recommended

Share This

POLL

Which financial product do you find most confusing and would like to learn more about?

View Results

Loading ... Loading ...

Subscribe to Our Newsletter

Receive insightful tips, essential tools, and exclusive insights straight to your inbox