The Ministry of Mineral Resources and Energy has announced fuel price hikes at all levels.

It’s National Savings Month, and we’re inundated with well-meaning messages encouraging South Africans to save. But is the savings message realistic when many cannot meet their basic needs at the end of the month, writes Deon Nobrega.

We’ve all seen the headlines lamenting rising inflation, rising gasoline prices, and soaring prices for food staples like cooking oil and bread. It’s the perfect storm faced by employees struggling from paycheck to paycheck.

According to the South African Savings Institute (SASI), South Africa has one of the lowest household savings rates in the world. In this economic climate, it is understandable that many South Africans simply do not have the ability to save, even if they wanted to.

Data from the Paymenow platform, which gives employees quick access to salaries they’ve already earned, highlights the real pressure employees face just to get to work throughout the month. We have found that those who apply most often do so to get money for transportation.

Ironically, they must have access to their salary in order to be able to get to work.

A whopping 36.2% of those requesting access to earned salary through the Paymenow platform do so for transportation. The second largest proportion – 19.8% – say they need access to their salary to buy food.

South Africans are really struggling to manage the escalating cost of living, with wages not always keeping up with inflationary pressures. Employees don’t use their earned pay to make extravagant purchases or fund luxuries, they do so to afford the bare necessities and to get by until the next paycheck lands.

Employees need help to regain their financial footing through responsible access to earned wages, so they can make ends meet and eventually be in a better position to save. Without the ability to access funds they have already earned, they risk falling into a vicious cycle of indebtedness through unscrupulous loan sharks and high-interest payday loans.

Following the latest fuel price increase, headlines indicate that taxi associations are offering fare adjustments of between 25% and 30%. Many commuters have taken to social media to say that most of their income is already used to fund transport costs.

It would be an easy fix for employers to give raises to absorb the rising cost of living, but the reality is that many companies are also feeling the economic pinch, and it’s just not a viable option for a lot.

Employers can, however, empower their staff to better manage these difficult times by offering them the opportunity to improve their financial health while maintaining their productivity. Where many South Africans are saddled with debt, financial literacy is crucial, as are alternatives to credit and loans, and flexibility and understanding from employers where possible.

We must accept that financially stable employees are more productive employees. As a company, we need to help employees move from a point of financial stress to a point of financial resilience, where they are on better footing and saving becomes a real option.

Deon Nobrega is Paymenow CEO.