We are approaching the festive season, and there can surely be no better time to recognise the power of an age-old African community savings mechanism: stokvels. Stokvels have been the savings ‘engine room’ for South African communities through apartheid and into democracy; and they remain very effective today, even within the context of the country’s troubling poverty. According to research, R44 billion is saved collectively by 820 000 stokvels in South Africa each year, and more than 11 million South Africans are currently members of stokvels. The vibrancy of local stokvels is one of the reasons why most of the major financial brands have launched specific accounts and services to meet their needs. Although the stokvel has traditionally been a cash-based community savings tool, today a whopping 41% are considered ‘banked’ and use, at the very least, a transactional account. There are a lot of money management options out there for stokvel leaders to consider. These range from opportunities to take advantage of the better interest rates paid by investment accounts to shopping discounts offered by bulk buying. There’s no question that with smart decision making the group’s money can be made to work harder, but for this to be true there has to be a careful analysis of costs versus rewards. If you have never even read this text or understood it, there’s a good chance your collective could be losing money. Individual stokvel members might also be able to put away more money than they think. The key again lies in understanding fine print of financial products such as credit life insurance, which members most likely pay for on their credit facilities. Yalu has become synonymous with credit life insurance, the least understood form of long-term insurance in the South African market. Credit life insurance covers borrowers’ debt in the case of retrenchment, disability or death. This type of insurance is sometimes mandatory and is generally offered by the same financial institution offering the loan. The premiums charged for such policies can vary, and as a result a lot of consumers find themselves unwittingly paying the maximum possible premium every month – creating room for savings if they were to choose a different provider. As always, information is crucial. Because many consumers aren’t aware of the details of their credit life insurance policies, they’re losing out on potential savings every month, and this money could contribute significantly to their overall savings efforts. As most stokvel members are already aware, there are only two ways to improve your financial situation: spend less or save more. In both areas, paying attention to all the details of financial products and services can have a big impact on the individual, and therefore the group. If, as a broad South African society, we improve this skill, our stokvel heritage will grow stronger than it already is. -Nkazi Sokhulu, cofounder and CEO at credit life insurance brand, Yalu.