What the One Rand Man Teaches Us About Budgeting


Why are South Africans such poor savers? Why do we never seem to have enough money to see us through the month, and spend more than we earn?

Living on only R1 coins for the entire month, the 32-year-old Cape Town-based architectural consultant is realising that in our modern, card-based society, we have lost our connection with our money and we no longer feel the implications of our spending.

Three weeks into a social experiment by Sanlam for National Savings Month to take a deeper look at our relationship with money, the One Rand Man is finding out.

Living on only R1 coins for the entire month, the 32-year-old Cape Town-based architectural consultant is realising that in our modern, card-based society, we have lost our connection with our money and we no longer feel the implications of our spending.

After many long hours of counting his salary – paid out to him in R1 coins – on his living room table, the One Rand Man has divided up his coins into piles to pay all his monthly expenses, and placed them in plastic containers.

His expenses include taxes, car payments, rent, pension and medical aid contributions, credit card debt, utilities such as water and electricity, and general spending money. He is now faced with some nasty surprises.

“None of this is making any money for me, it seems a little bit silly. Everything is just going to disappear,” he says. “This is all I have left,” he realises looking at the containers with his spending money for the month.

The One Rand Man’s biggest monthly expense is his car payment. “Too much is going towards my car – I don’t know why I got such an expensive car. I don’t know if it is peer pressure or society – I could easily have got a car for a smaller amount and the rest could have gone to savings.”

Another large expense is his credit card debt. “This really makes you think twice about taking out a loan – how much you have to pay back at the end of the day.”

So what do the experts say about the One Rand Man’s experience so far? According to Sanlam’s investments economist Arthur Kamp, a key learning from his experiment is the power of budgeting. “It means understanding how much money you are getting in, and understanding exactly where all of that money is going, as the One Rand Man is doing.”

Kamp says the One Rand Man is not saving nearly enough towards retirement. Also interesting to note that he sees his pension as an expense like rent or tax, and not as a savings that is in fact making money for him in the long term. This is unfortunately a mindset shared by many young South Africans, and one that needs to be shifted to enable them to one day retire comfortably.

“Looking at his Tupperware budget, his money piles look a bit out of sync in terms of what he is putting away for retirement. His allocation towards his car payment – a depreciating asset – is very high. The important principle here is compound interest – known as the eighth wonder of the world. It becomes very powerful the longer you can let it work. Even very small amounts put away towards savings and retirement when you are young, make a huge difference when you are older.”

He says all South Africans can have a healthier relationship with money by firstly, understanding what money is. “It is not just something with which to pay for goods and services, it is also potentially an asset.

Every Rand that you spend, is an opportunity lost to allow that money to work for you by earning interest or dividends, and growing over time. Using a credit card to pay for goods and services is not money – it is someone else’s money that you have borrowed and that you have to pay back, most likely with interest.”

Kamp says it is crucial to start saving as young as possible. “National Savings Month is not only this month, it is every month from the day that you start earning a salary.”

Now that the One Rand Man has “drawn up” his budget, he will have to physically manage every R1 he spends from his plastic containers. His bank accounts, bank cards and debit orders have all been frozen for the month, so this will be all he has.

For the rest of July, South Africans can follow his experiences in making large payments in coins, how his usual lifestyle choices are affected and finally how he deals with the end of the month when he potentially only has a few coins left.

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Article by Sanlam

Follow the One Rand Man’s story on onerandman.sanlam.co.za, on Twitter or Instagram. The third documentary episode of his experience is available on Sanlam’s YouTube channel along with commentary and analysis by the experts.


Sanlam is a leading financial services group listed on the JSE Limited and the Namibian stock exchange. Since its inception in 1918, Sanlam has transformed itself from a life insurance company to a fully diversified financial services business with assets of more than R560 billion and a global footprint. Areas of expertise include insurance, financial planning, retirement, investment and wealth, with comprehensive and tailored financial solutions to individual and institutional clients. For further information, visit www.sanlam.co.za or follow us on @sanlam


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