stokvel 300x225As a citizen of South Africa you have no doubt heard the term “stokvel”. Stokvels are also known as group savings clubs, societies or social clubs, and lately even investor clubs.

A stokvel is defined as a savings society where members regularly contribute, usually monthly, an agreed amount to a central fund. Once the contributions are collected, the stokvel will pay out a pre-determined sum or percentage to a different member each month.

Research reveals that 42% of South African households use stokvels as a savings tool, proving their popularity. Here are a few important things to be aware of and consider in relation to stokvels:

There are many different types of stokvels and each serves a specific purpose. The most common type is the “contribution stokvel” referred to above. There are also party stokvels, grocery stokvels and stokvels that will only pay out at under certain circumstances (such as in the event of death) or at certain times (like Christmas time).

  • Stokvels are often governed by a constitution. The constitution includes information pertaining to contribution amounts, duties of each member, the type of stokvel, when meetings will be held, etc.
  • Members rarely default. The sense of community and shared responsibility is defining trait of this type savings scheme.
  • Knowing when you will get your pay-out makes it easier to develop and execute a financial plan.
  • As a way of encouraging savings, some banks now offer specific accounts for stokvels; the benefits of which differ from bank to bank.

Stokvels are a great initiative. However they need to viewed as one of many savings tools available. One should not forego a retirement investment, for example, in favour of exclusively using stockvels. The reason being, even if you are still saving, other types of savings and investment vehicles offer various other benefits that stokvels don’t (such as being geared towards long-term investing, or offering tax saving benefits, etc).

Proverbs 21:20 says “In the house of the wise are stores of choice food and oil, but a foolish man devours all he has.” The Bible encourages us to save and not to spend every cent we bring in or otherwise waste money. The money you receive as a stokvel member should be used wisely and should benefit you not only today but into the future as well.

Lesetja Madiba is a Financial Wellness Consultant at Citadel.

National Wills Week

WILLS AND ESTATE PLANNING 1024x665Last week was “National Wills Week” and there was a big drive to get people to have their wills drawn up. Many of us will be familiar with the phrase, “there are only two certainties in life: death and taxes”. Accordingly, it’s wise to be prepared for both. The terms “Wills” and “estate planning” are often used together. A Will is a legal document stating what should happen with a person’s possessions after their death. Estate planning is the act of preparing for the transfer of a person's wealth and assets after death.

While there are many benefits to estate planning, the most important one is that your loved ones will be spared the financial storm that one’s death can create.
Consider the following when embarking on your estate planning and will drafting:

It is necessary for everyone to have a will, irrespective of whether or not you are wealthy, as the key consideration is the orderly distribution of your wealth and adequate provision for your dependents and loved ones.

A will gives instruction not only regarding what happens to your assets, but what happens to your debts as well. Assets, life insurance, pensions, property, cars, personal belongings and debts all form part of your estate.

Seek the help of professionals when drafting your will. Wills are complex legal documents which need to be drafted with the law in mind lest certain of your wishes and instructions be ruled invalid.

Should you die without a will, your estate will be handled in terms of the law of intestate succession. This means that the State will determine how to handle your affairs.

A knowledgeable and trustworthy executor should be appointed. An executor is appointed by you to ensure that all the instructions contained in your will are carried out and all necessary debts and taxes paid.

Proverbs 27:1 says “Do not boast about tomorrow, for you do not know what a day will bring forth.” Estate planning is often out off for whatever reason. The truth is that it needs to be prioritised because we don’t know when our time on this earth will be up. Planning for death enables you to take care of your family, even after you are gone.

Lesetja Madiba is a Financial Wellness Consultant at Citadel.


The weather is getting warmer the trees are blooming. Spring is here. It’s a new season and for many of us spring season comes with spring cleaning. The history books suggest the origin of the spring cleaning is an ancient Jewish practice of thoroughly cleansing the home in anticipation of the spring time memorial feast. While the act of cleaning may not be very appealing, for our finances it is definitely needed.

Financial spring cleaning should help to amongst other things serve as a time of reflection and also a time of review. How would one go about financial spring cleaning? Consider the following:

  • Get re-organised. Make sure the important documentation you keep is stored safely and is up to date. Out dated statements and clutter should be disposed of properly.
  • Review the budget and get rid of the winter expenditures. As the season changes some expenses are no longer relevant. Make sure to make sure your budget is season relevant.
  • Assess your debt. It is a good idea at the time when you review your budget to relook your debt. Make sure you know who it is that you are paying and how much you are paying.
  • Do a Credit Check. If you have not done one recently or this year then it is certainly time to do one. A credit check will also help you in determining who you owe money to and it goes a long way in protecting yourself from fraud.

Proverbs 27:23 says “Be diligent to know the state of your folks and attend to your flocks”. The Bible here speaks about knowing the exact state of your financial affairs, not only to know what the state of your affairs is but also to care for your affairs. The Bible often refers to a good steward in many respects. As we enter into a new season, refresh your financial affairs and leave the clutter of the old season in the past.

Lesetja Madiba is a Financial Wellness Consultant at Citadel.

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