A CLOSER LOOK INTO THE LIFE OF THE ‘ONE RAND FAMILY’
Following last year’s ground-breaking ‘One Rand Man’ experiment, a new, more ambitious financial education initiative – the ‘One Rand Family’ – is playing out in July. Via weekly online episodes and e.tv broadcasts (Monday – Thursday), the brave family will lay their financial situation bare for all to see. Whereas the One Rand Man only had to fend for himself, this year, a family of four has embarked on the same challenge. The idea is that they will learn more about their spending habits, money behaviour, family finances and surrounding dynamics and their individual financial attitudes by physically re-connecting with their hard-earned money, one rand at a time.
The experiment from Sanlam is timed to coincide with National Savings Month, an annual initiative aimed at placing the spotlight on the lack of savings and high levels of indebtedness of South Africans. Approximately 45% of credit-active consumers have impaired credit records and household debt averages about 75% of disposable income
In this first web-episode, we meet the vibrant, modern South African family:
• Commodities broker dad Sibusiso ‘Sbu’ (42), the head of the household, pays the family’s two bonds, covers insurance and other essential needs. Apart from managing the demands of his career, he takes pride in being able to provide for his family. He married the ‘love of his life’, Londiwe, and admits to sometimes being ‘blind to her faults’. (He describes Londi’s shopping habits as ‘moderate’). Sbu drives a BMW 3-series and loves watches, sound systems, big screen TVs and collecting vinyls. Money isn’t taken for granted, but he’s worked very hard for it. So why apologise for spending it?
• Town planner mother Londiwe ‘Londi’ (36), is a dedicated working mother. Londi drives a Range Rover Evoque – her secret pride and joy – and believes you need to make a statement upon arrival to be taken seriously. She spends around 50% of her salary on her car, including insurance and running costs. Londi likes the finer things in life – spa treatments, beautiful clothes and shoes, lunches and movies. Shopping is her favourite pastime and she isn’t shy admitting to not looking at prices and just ‘swiping.’ She sometimes hides her purchases from her husband after a ‘productive’ day at the shops.
• Adorable daughter Anaya ‘Naya’ (3) is the apple of her dad’s eye and knows just how to wrap the entire family around her little finger. She will only let hairdressers touch her hair (mom Londi is banned!) and loves a shopping outing with her mom – returning home with a new outfit or the latest toy is a of course a must.
The family lives in an upmarket home bought late last year and, on the surface, life is great. But they suspect they are living beyond their means. And according to well-known personal finance journalist Maya Fisher-French, the family’s suspicion isn’t far off. “The family has no contingency budget and is spending a huge amount on a depreciating assets – for example, their cars,” Fischer-French says. In Sbu’s own words: “We have great jobs, good salaries, great lifestyles. But are we fooling ourselves?”
Over the next month, Sanlam, with the help of experts, will follow the family to gain insight into their spending behaviour in an attempt to get to the bottom of why so many South African families are landing themselves in financial ‘hot water’.
Says Yegs Ramiah, chief executive of Sanlam Brand: “Specifically, we’ll be looking for insights into how emotions and the ego dictate how our financial lives unfold. So much financial education is focused on rands and cents, how to budget, how to save, and why debt is a bad idea. And of course this information is vital. But our goal with the One Rand Family is to establish why as South Africans we behave the way we do financially. Why we spend every cent we earn – and more. Why our money thinking tends to be so short-term. Why status is more important than security.”
“By reaching more deeply into the issue – and bringing in analysis from some of the country’s leading finance and behavioural experts – we are hoping to break new ground in the process of teaching South Africans to take charge of their own financial destiny,” says Ramiah.
So, with their online banking blocked, their bank, credit and store cards safely locked up, and their salaries lying in a massive heap of coins on the floor, it remains to be seen how dealing with one rand coins will impact on the family’s attitude towards money. Watch the family’s adventure unfold over the coming month. Web-episode One is live today at www.onerandfamily.co.za or catch it on e.tv on Wednesday 8 July at 5.25pm. The site also features useful expert analysis and budgeting tools.