Money management tips to bolster stokvels and burial societies’ success

Do stokvels and burial societies require money management strategies? Would the individual members of these groups also benefit from having the knowledge and skills to help them manage their own funds? The answer to these questions is a definite “yes”.

Good money management is important for the proper administration, sustainability and growth of any stokvel or burial society.

Many stokvels have the objective of creating (through collective actions) value or wealth, while many burial societies have the goal of providing a dignified funeral for their members. It's generally assumed the members of such groups want to secure their money and benefits and always receive what is due to them. Good money management that is transparent prevents theft and losses, allowing members to benefit from their collective savings. 

It involves having strategies and policies in place that determine how the group will handle its finances, ranging from agreeing on financial goals and monthly contributions to managing the group's collective funds by saving and/or investing, budgeting for expenses and keeping track of spending. 

There are standard practices for good money management but the individual goals, objectives and circumstances of a stokvel or burial society should also be taken into account. Here are some tips to consider: 

1. Contribution payments 

All members should, as far as possible, pay their contributions timeously and in full.

If members have a challenge, there should be a strategy and policy in place that makes provision for nonpayment. The policy should consider the circumstances that would lead to nonpayment. For example, the policy should not be punitive in an event such as sudden income loss. Provision for a reduced instalment payment may be an option.

The strategy and policy should always consider the financial situation of the members and the group. 

2. Savings build up

Stokvels and burial societies should consider building up “reserve” savings. These would be useful in the event of any unforeseen circumstances. Members usually budget for one contribution per month and when a new financial need arises, it will not be every member that can afford sudden additional contributions.

3. Monthly budget

A detailed monthly budget is important for both the individual member as well as the group. Strict adherence is the only way said budget can assist in good money management. It is important for the budget to be realistic. Each member and the group should ensure that they can afford all the items in the budget. 

4. Review spending

Even though items may be in the budget, it is still important to monitor the group's spending. A monthly review to determine the continuation of line items and addition of other line items is necessary. For instance, line items budgeted for during the festive season may not be necessary after the holidays. 

5. Monthly expenses

Stokvels and burial societies should always look at recurring monthly charges with a view of reducing or removing them. These are expenses such as bank fee charges. There should be continuous assessment of whether the banking product selected and paid for serves the interests and purpose of the group. For instance, for a stokvel that has not started a business having a business bank account, with a monthly fee attached, may be an unnecessary expense. 

Developing money management strategies made simple

Tyvision Media — producer of the financial literacy TV series Ke Zaka: Stockvel Insights on Business Day TV — can assist stokvels and burial societies to develop money management strategies. It understands that each group is unique and so tailors the support that it provides accordingly.

Tyvision Media can also assist groups with professional administration including scheduling meetings, setting agendas, taking minutes, record-keeping and the development of succession plans. Plus insourcing relevant, credible and reliable information to help stokvels and burial societies make the best possible financial decisions with their available resources.

For assistance in the professional administration of your group, email alucias@tyvisionmedia.co.za or WhatsApp 081-596-1065 or 072-938-7256.

This article was sponsored by Tyvision Media.