Ways to save for lobola

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Weddings are expensive, and in African culture the financial commitment can be even more pronounced because of customs such as lobola. Among many South Africans, lobola is seen as a token of gratitude by the bridegroom’s family to the bride’s family for caring for her and allowing her to become the bridegroom’s wife. The amount depends on a variety of factors, such as the bride’s level of education, her cooking skills, and whether she has children. The lobola is on top of the costs of the wedding itself. According to Cape Town-based financial advice firm Crue Invest, a wedding in South Africa costs, on average, between R70 000 and R150 000. Couples spend an average of R30 000 on their honeymoon, and between R20 000 and R30 000 on wedding rings. Wikipedia says the following about lobola: “Lobola in Zulu, Swazi, Xhosa and northern and southern Ndebele (mahadi in Sesotho, roora in Shona, magadi in Northern Sotho, and lovola in Xitsonga), sometimes referred to as either ‘bride wealth’ or ‘bride price’, is property in cash or kind, which a prospective husband or head of his family undertakes to give to the head of a prospective wife’s family in consideration of a customary marriage.”

It is generally accepted that a minimum of 10 cows, or their cash equivalent, is a good starting point in the lobola discussions.

According to the Nguni Cattle Breeders Society, a cow costs, on average, R9 000. So assuming that the bride’s and groom’s families agree on 10 cows, the groom’s family will have to pay lobola of R90 000. But this amount might not seal the deal, because, depending on your cultural background, there are other costs.

Let’s take Zulu culture as an example. The lobola negotiations always take place at the home of the bride’s family. When the groom’s delegation descends on their homestead, the delegates will stand outside the gate and introduce themselves by shouting out their clan names. The bride’s family will remain in the yard, pretending not to hear. When the bride’s family are satisfied that the groom’s delegates have shouted enough, they will send a young boy to attend to the delegation at the gate, and the groom’s family must pay money in order to enter the yard.

The groom’s family will have to pay more money to call the bride’s father to the negotiations. As this process unfolds, the groom’s family is required to do all the talking, and must pay an imvulamlomo (“mouth opener”) to the bride’s family for them to start engaging in conversation with the groom’s representatives.

Alexander Forbes Financial Planning Consultants say the following four avenues are the best ways to save for lobola and the wedding day:

• A tax-free savings account. This product allows you to invest up to R33 000 per tax year, or a maximum of R500 000 in your lifetime. You do not pay any tax on the dividends and interest earned by your investment, and you do not pay capital gains tax. You can withdraw from this investment at any time without penalties or restrictions, so the investment offers the liquidity required for short-term investing.

• Unit trust funds. This option is effective if you want to invest more than R33 000 in a tax year. The funds are also easily accessible with no penalties or restriction.

• Money market account. This option allows you to invest directly in cash and various money market instruments. The returns depend the interest rate.

• Stokvel. Each member of a stokvel has a turn to receive a cash lump sum, which is paid every month. Some stokvels contribute amounts monthly and these funds are invested in a stokvel account.

Happy Ngale, a financial well-being consultant at Alexander Forbes, says lobola makes getting married very expensive, because many couples also have a traditional “white wedding”.

“It is advisable to save for lobola well in advance, giving enough time to earn returns. With many options available to the investor, various factors such as liquidity, the term of the investment and the risk profile of the portfolio, should be considered before deciding where to invest the money,” Ngale says.

While the burden of the lobola price is a traditionally laid upon the groom and his family, women get hands on when the process has been concluded in planning their wedding day.

Wedding budget

Nicky Lala-Mohan, the Credit Ombud, says it is important that couples discuss financial matters before they get married, to avoid a debt trap.

“Ladies might not be brave enough to ask that their future spouse wraps their engagement ring in a credit report. The same applies to the men: the lady’s ‘yes’ is not requested to come with a credit score. As unattractive as this may be, understanding one another’s finances and credit should be discussed in any relationship,” Lala-Mohan says.

A study by global payments technology company Visa found that:

• 30% of women were willing to spend more than six months’ salary on a wedding, while only 7% said one month’s salary was sufficient.

• The women surveyed said the average budget for a wedding was R53 885, while the average budget for a honeymoon was R24 474.

• Only 15% of the respondents thought a budget of R50 000 or more was reasonable for a honeymoon.

Expensive wedding, unhappy marriage

THE more expensive a wedding, the more likely it is that the marriage will be turbulent, according to a study by Andrew Francis and Hugo Mialon, both associate professors of economics at Emory University in the United States.

Their study found that:

• Spending between $2 000 and $4 000 (roughly between R26 000 and R52 000) on an engagement ring increases the risk of divorce 1.3 times, compared with spending between $500 and $2 000 (between about R6 000 and R26 000).

• Spending $20 000 (about R260 000) or more on a wedding increases the risk of divorce 1.6 times, compared with spending between $5 000 and $10 000 (roughly between R65 000 and R130 000).

• Spending $1 000 (about R13 000) or less on a wedding further decreases the risk of divorce.

Lobola app

THE Google Play store has an app that can help you to work out how much lobola you will have to pay.

Step 1: Download the Lobola Calculator app.

Step 2: Answer the questions, such as employment, age and education.

Step 3: Click “Calculate”, and the app will provide the lobola you will pay in rands and cows.

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