Consumers fear rising costs, not enough money
SOUTH Africans are running out of cash even before the month-ends without paying their monthly debt, including school fees.
And women are feeling the impact the most, with increasing interest rates, inflation and living costs, unexpected expenses and load shedding, which has had a knock-on effect on their health, work and home life.
Debtbusters, the country’s leading and largest debt counsellor, presented its findings on Thursday from its Money Stress Tracker, an annual survey that gauges the financial status of individuals.
This year, 35 000 consumers who are not under debt review participated.
According to the survey, three out of four people were stressed over money, and 70% spent more than 30% of aftertax income on debt repayment.
It also found that those who earned R20 000 per month had the most debt repayment pressure, with 62% having unsustainable debt levels.
Those who earned less than R5 000 a month were most stressed about paying debts and school fees, while those earning R35000 or more were most worried about the interest rate increases.
Although stress levels in respondents aged between 45 and 54 increased by 23% compared to 2022, the survey found that those aged between 24 and 35 with lower incomes felt the most stress and were anxious about money. People aged 55 and older were worried about having enough money to retire.
To deal with money stress, all age groups said they were cutting back on spending, a strategy that, on average, 44% of respondents had adopted. This year 38% said they were looking for a better job or higher pay, up nearly 50% from last year.
The survey suggested that younger consumers with lower income were more likely to be looking for a betterpaying job.
Benay Sager, head of Debtbusters, said that, compared to 2022, both men and women were more stressed about all facets of life, but women were more stressed about their finances.
“They shoulder a lot of the burden when it comes to the provision of finances, not just for themselves but generally for family and acquaintances. When you are stressed about finances, it will impact everything else,” he said.
Diane Salters, a psychotherapist and transactional analyst, said there could be two reasons for a higher proportion of women than men reporting high stress levels.
“Firstly, women are often carrying more of the burden of family care and responsibility than men. Secondly, women are more likely to admit to feeling stressed than men and reach out for help. Social conditioning often stops men from admitting they need help. Worldwide, women are more likely to use health services and social programmes. This is good because it means that women are more likely to get and use any help available,” said Salters.
Charnel Collins, CEO of National Debt Advisor, said debt forgiveness could be a tool to relieve indebted individuals. However, it would not be a simple solution.
“It requires careful consideration of who bears the cost, which typically falls to the lenders, in this case, the companies. Not all companies can absorb these losses, and this could potentially destabilise the financial system if it's not handled carefully. Alternatively, mechanisms like debt mediation or debt counselling services might be more viable for most South Africans.
“It’s also crucial to remember that these measures should go hand-in-hand with efforts to stimulate economic growth and entrepreneurial or employment opportunity,” said Collins.
Denise Hartley, chief operations officer at FNB Collections, said managing personal finances could be overwhelming in view of mounting debts and financial obligations.
To assist those seeking debt consolidation and debt review, Hartley said it was crucial to understand the difference. She explained that debt consolidation involved combining multiple debts into a single loan, while debt review was a legal process that provided debt relief to over-indebted consumers.
“Before following any course of action, it is important to understand your debt position, scrutinise and question your monthly budget and expenditure – know what is necessary and what is not, and examine all options available to you,” said Hartley.