Young people under financial strain

YOUNG South Africans between the ages of 18 and 30 are financially stressed and are finding it difficult to meet their financial obligations.

This comes after a survey was conducted by research institution infoQuest, a leading South African online research company. “Three hundred randomly selected respondents from quotas representing the South African online young adult working population were interviewed,” said infoQuest.

The study showed that when the respondents were interviewed to rate their current financial situation on a scale from 1 to 10 (where 1 means “terrible” and 10 means “excellent”), only 15% gave a 9 or 10 rating, while about 40% gave a rating of 5 or less).

Managing director of infoQuest, Claire Heckrath, said that the higher the personal income bracket, the higher the financial satisfaction levels, but even of those earning R20 000 and more per month, only 22% were really satisfied with their financial situation.

The study also revealed that young consumers are also heavily indebted.

“Two in five (40%) have a personal loan from a financial institution, one in four (25%) have a personal loan from a family member or friend, and 17% have an overdraft facility. Those in the R10 000 to R20 000 personal monthly income category have the highest incidence of personal loans at 52%. Amongst those that have credit cards, just over 1 in 3 (36%) have more than one credit card, and in the 18–24 year age category this is 41%,” the study found.

“It is concerning that young working people are relying on debt to such an extent, limiting their ability to save, which is so important,” said Heckrath.

The study also found increasing food prices are a major financial burden, with 36% saying that they had struggled at some time over the past year to buy food and groceries. Additionally, almost 3 in 5 (57%) had schoolgoing children and 32% of them had struggled to pay school fees in the past 12 months.