Also, what is a Sou Sou? So some of you may have heard of this before but most of you haven’t. I first heard about it from Planet Money a few months ago and I found it pretty interesting. You see, a Sou Sou (or sou-sou) is an informal savings group. Every month or week or other indeterminate length of time, you and your friends put an equal amount of money into a pot, after which the money all goes to one individual in the group. The order in which everyone gets the money is already set so you know when you’ll get your money. If there are 12 people in a group and they each save $100 a month, then that means that each one of them will get at least $1200 during one month of the year before the order starts over again.
I may have rushed that explanation a little bit but seriously, I find this savings method fascinating. It developed in West Africa and the West Indies ages ago and people continue to use it to this day. Interestingly enough, while doing a little research on it, I found that most young people use it to help pay for going to Carnival, quite possibly one of the most awesome and amazing looking things ever.
But back to the reason I find this fascinating. See, one of the main problems most people have with trying to establish their financial independence and even with trying to build good habits is a lack of self control and accountability. What a Sou Sou does is it makes saving a group activity. If you don’t put in your payment one month, you let down your friends and family and screw them out of their payday. You break their trust they have in you. This guilt alone should keep every member of the Sou Sou from letting bad savings habits creep into the mix.
While you’d be better off putting the money into a savings account or an indexed mutual fund and using compound interest to help build your cash, I can completely understand people utilizing this. First off, it would be sweet to get a nice lump sum amount every once in a while. I mean, what if the 12 people put aside $100 a week, instead of a month. That means that every 12 weeks you would get $1200 put in your pocket. That lump sum right there is amazing! And you’ve built a good savings habit. If you take that cash and sock it away somewhere, you’re good! You may have missed out on the interest but the fact remains, you’ve taken control of one aspect of your life and you’re helping others do it as well at the same time. That’s not just great, that’s admirable! One of the things I strive for is to help people get their finances under control and begin to take back their lives when it comes to money. A sou sou can do more for a group of people than I ever could!
If you want to do a Sou Sou, I suggest getting together with close friends and family and putting one together. Start out with people you trust. If you want to really branch out there, there’s actually a website you can check out (http://sou-sous.com/home/) that is a sort of online community to help keep you accountable. In the long run though, you’d probably be better off sticking with your close friends and family. Trust is always going to be the most important thing when money is changing hands. If you don’t trust someone, then you probably shouldn’t do a sou sou with them. Or do business with them. And definitely don’t tell them embarrassing stories about that time at that place. You know the one I’m talking about. Definitely don’t tell them that.
So, in other news, I’m really looking for more interesting and innovative DIY finance tricks and tips, like the sou sou, that can help me and others improve themselves in their financial goals. If you read or hear about anything, drop me a line! If you’d like to write about it, let me know and we can absolutely feature you on the site. Until next time!