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What is group economics?

Household Finance

What is group economics?

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Group economics, as the name suggests, is engaging in economic and financial activities with a view of getting better value from those economic activities by virtue of one being part of a larger group. This is where trust and honesty are used as currency in conjunction with the rands and dollars. Groups of people consisting of 2 or more people coordinate their activities, on the basis of mutual trust, in order to get a better saving or better value for the money spent.

A good example of this is carpooling (a.k.a being in a lift club) with four colleagues who stay in the same area; each member drives a single week out of every 4 weeks. In this case, each member can save a maximum of 3 weeks’ worth of petrol, vehicle wear and tear, toll fees, as well as vehicle mileage each month. In numbers that means if I spend an aggregated total of R4000 (all costs inclusive) a month to travel to work and back every month I can spend as little as R1000 to R2000 (Assuming you use the lift club between all and half of the time).

The aim here is to get better value for less money spent through the sharing of resources with others. This can be used in almost any circumstance and for almost anything (sharing an internet connection with your neighbour, carpooling, funding business ventures, booking lavish venues at a much cheaper price… etc).

The keys here are commitment and honouring your commitments.

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