It’s a brand new year, and not only that – it is a whole new decade! And this might be the motivation you need to take a hard look at your current stokvel/club. Just like we plan for new things in the new year (some call them resolutions), our stokvels need this planning too – by just reviewing if the group is still on the right track or what to improve.
The Constitution review
As your stokvel is a standalone entity, it is important to keep your stokvel’s paperwork up to date, especially when there are changes to membership, contributions, rules etc. Your group constitution governs your stokvel, so it is important that all members are familiar with it and most importantly that it is up to date. So the first planning meeting of your stokvel this year should include reviewing this legally binding document, to check if it still reflects everyone’s interests that they signed up for. Should your group feel it needs serious changes or to be redone, it is best to get a legal person/lawyer or an expert to assist in creating a new professional constitution. This is especially important if your stokvel is going to be getting into big deals this year. This document is the core of what makes your stokvel genuine and legal, so make it as detailed as possible and signed by all members. It must be a PROPER, PROFESSIONAL and LEGAL document.
Your group constitution governs your stokvel, so it is important that all members are familiar with it and most importantly that it is up to date.
Usually after December payouts and rotations, in January some members withdraw from the group/club or there are additional members or member issues. It is better to "take stock" of membership early in the year as this will affect a lot of things in your stokvel group. Review your membership, check if all members are still committed to the cause of the stokvel, reconcile membership numbers – taking into account withdrawals and additions. This will affect the stokvel contributions and budget, so this review is good for planning.
A good start of planning is reviewing what was done previously first. Have a look at the past year contributions, what went right and what went wrong. Which members are not consistent or were not contributing (affecting the running of finances of the stokvel) and decide what can be done about this as per the constitution. To keep up with time value of money, it is important to review contribution amounts too. Ideally, each new year contributions should increase by at least 10 per cent, so if each member was contributing R500 in 2019, in 2020 it should be R550. This yearly increment should be on the constitution too. This will be reflected in the budget of the stokvel for the year. Yes, stokvel groups should BUDGET! It is one of the duties of the Treasurer of the stokvel to budget, so to assist them this type of planning during contributions review will be important. There is a budget template (also constitution and contribution reconciliation) available in the book Stokvels – How they can make your money work for you. These templates can be amended to suit your group and can be of great assistance to your stokvel.
Any changes on what to do with contributions this year (like investing instead of consuming all), should be documented and added to the constitution if all members agree and sign on it. Ideas that will make the stokvel progressive and grow can be welcomed as long they not a scam and are legal.
Review dealings of your stokvel
Scam-proof your stokvel! Do your due diligence on your stokvel, like where contributions are being kept (hopefully a bank), invested (with a registered financial service provider) and are used legally only. There have been a lot of scams disguising themselves as stokvels. This year make sure you don’t and your stokvel doesn’t fall for them either. Financial education: empower yourself and your stokvel members with financial knowledge, read relevant financial books, attend workshops and consult with experts. And you will know how to spot a scam. Greed: as much as growth and progressiveness is encouraged in modern stokvels, check greed! We all want to make money and stokvels are a great vehicle to raise capital to make more money with, but do not be greedy and want your stokvel to participate in every "good deal" available, as this will expose the stokvel to the temptation of taking on even scams. Check on the objectives of the stokvel on the constitution. Yes, they can be amended but always stick to the goal of what the group wants to achieve and agreed on. And one of them should be: NO SCAMS.
Review your stokvel intention
Remember why you started or joined this stokvel and keep working on that. And make the stokvel you are in to work for you! That’s all…
May this decade be an era where stokvels become really revolutionary, be progressive, be wealth creators and be a weapon to significantly grow the South African economy. I wish you a financially and socially impactful stokvelling experience in 2020!
Congratulations to the Optimists Savings Group from the Eastern Cape who have won their very own copy of Stokvels - How they can make your money work for you.
Wriiten by: Palesa Lengolo, author of Stokvels - How they can make your money work for you