Stokvels as a Saving Method

MoneySavvyKids is a financial educational curriculum that is set to educate children and parents about saving, spend, tax and Budgeting and many more saving and investing methods.

Stokvels is one of the oldest saving method used by people as a means of saving money. There are many Stokvels associations in South Africa that you could join in order to save and invest money.

Stokvels are group savings schemes providing for mutual financial assistance as well as social and entertainment needs.

Stokvels are seen as a traditional way to save as it is safe and has been around for many years. The name stokvel comes from the term stock fairs, as the rotating cattle auctions of English settlers in the Eastern Cape during the early 19th century were known.

Stokvels are request of only twelve or more people per club functioning as a rotating credit unions or saving system in South Africa. Members contribute fixed amount of money to a central fund on a weekly, fortnightly or monthly basis.

Stokvels usually have a constitution which dictates the size of the contributions, when the accumulated money is to be paid out and the roles and responsibilities of the members. Each month a different member of the club receives the money in the fund, which was collected during that period. Defaults on contribution are very rare as other members will know if one person haven’t paid your contribution, and also because there are regular meetings held as they are a reminder of what you will gain when it is your turn. Depending on the type of stokvels, the members can use the collected fund for their own use, for payment or investment purposes.

These take different forms depending on the purpose of the scheme… ranging from burial stokvels, savings/money stokvels, grocery stokvels to investment stokvels to birthday celebration stokvels. Burial stokvels have higher membership and are highly concentrated competed to the other stokvels according to stats.

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It is estimated that one in every two adults in South Africans is a member of at least one of 89 000 stokvels or investment system. Black adult South Africans invest approximately R12 billion in stokvels a year.

Stokvels are a strong market in the area of traditional collective saving, and are estimated to be worth R25 billion. There are 8.6 million stokvel members in South Africa which represents 23% of the adult population and an estimated 421 000 stokvels in total. This is according to African Response’s latest survey on the status and market potential of stokvels.

Contact Person:
Name: Kathryn Main
Position: Managing Director
Email address: kathryn@mainmultimedia.co.za
Phone: +27 (0)79 3700 601

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Why are we in such debt?

The internet loves making lists of things, from top 10 beaches you have to see, to the top 10 restaurants in your area. So it’s no surprise that there’s a list of the top 10 reasons why people fall into debt. Some are fairly obvious, some are a little more excusable and one is absolutely ridiculous.

Bankrate.com’s list of the top 10 leading reasons for debt starts off with reduced income/savings. That stands to reason. Next up is divorce, followed by an important one, namely poor money management. The list goes on through unemployment, gambling, medical expenses, saving too little, no money-communication skills, banking on a windfall and finally, yes ” FINALLY ” financial literacy.

It’s no wonder that as South Africans, 70% of adults are in debt when financial literacy’ comes in at number 10. It begs the question, if financial literacy was at the top of the list, would there be a list at all? There are glaring inadequacies in the education system, from junior school right the way through to tertiary education that does not include any sort of formal financial literacy.

The lynch pin of education is that, when done correctly, can eradicate an abundance of unnecessary shortfalls when education is lacking.

There is no use in trying to solve our financial problems if we don’t understand finances in the first place. Our lack of financial literacy in this country breeds a society that is constantly playing catch up with their finances and, worse still, putting out fires constantly.

Until we see a shift in paradigm that sees financial literacy (or lack thereof) as the number one cause for debt and financial instability, we’ll spend our lives reading about the top 10 beaches to visit, as opposed to going to see them for ourselves as a result of our financial instability.

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Teaching through entertainment: Gamification

TEACHING THROUGH ENTERTAINMENT: GAMIFICATION

Gamification originated as a marketing tool as a means to get people to enjoyably and creatively engage with a brand or product. This technique proved so successful that it has carried over into the world of education. The core of gamification is the way in which users are engaged to solve problems by means of the game mechanics.

Now, it’s not to say that it’s all about the game and playing it. It’s more about applying one’s knowledge and understanding in a real-world situation. Furthermore, when one is enjoying something that is mentally stimulating, the brain releases dopamine, which is a naturally occurring endorphin linked to enjoyment. When this is experienced during a learning process, the likelihood of the information being understood, retained and recalled is increased across the board.

As a rule of thumb, those who use gamification as a tool for education, there are a few check boxes that should be ticked in order to full entrench the platform as well as the message. These include:

  • Creativity and an interesting concept
  • Mechanics that reward the user, such as badges, leaderboards, etc
  • Game currencies which are used to improve the overall gameplay itself

By engaging users in a manner that excites, challenges and rewards, gamification is the best way to get users to learn, without feeling like they’re going through the (sometimes laborious) process of learning.

Why are we in such debt?

The internet loves making lists of things, from top 10 beaches you have to see, to the top 10 restaurants in your area. So it’s no surprise that there’s a list of the top 10 reasons why people fall into debt. Some are fairly obvious, some are a little more excusable and one is absolutely ridiculous.

Bankrate.com’s list of the top 10 leading reasons for debt starts off with reduced income/savings. That stands to reason. Next up is divorce, followed by an important one, namely poor money management. The list goes on through unemployment, gambling, medical expenses, saving too little, no money-communication skills, banking on a windfall and finally, yes FINALLY financial literacy.

It’s no wonder that as South Africans, 70% of adults are in debt when financial literacy’ comes in at number 10. It begs the question, if financial literacy was at the top of the list, would there be a list at all? There are glaring inadequacies in the education system, from junior school right the way through to tertiary education that does not include any sort of formal financial literacy.

The lynch pin of education is that, when done correctly, can eradicate an abundance of unnecessary shortfalls when education is lacking.

There is no use in trying to solve our financial problems if we don’t understand finances in the first place. Our lack of financial literacy in this country breeds a society that is constantly playing catch up with their finances and, worse still, putting out fires constantly.

Until we see a shift in paradigm that sees financial literacy (or lack thereof) as the number one cause for debt and financial instability, we’ll spend our lives reading about the top 10 beaches to visit, as opposed to going to see them for ourselves as a result of our financial instability.

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