SA’s youth are taking strain financially

YOUNG people 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,” according to infoQuest.

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

InfoQuest’s managing director, 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%. Among those who have credit cards, just over one in three (36%) have more than one credit card, and in the 18- to 24-year age category, the figure 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 that 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 three in five (57%) respondents had school-going children, and 32% had struggled to pay school fees in the past 12 months.

“One in five young working South Africans is hustling, that is, they have more than one regular source of income. In the 18- to 24-year age category, 23% claim to hustle, while this was 17% in the older age category of 25 to 34 years. Young South Africans have had to find ways of supplementing their main source of income, and we anticipate that this figure will grow over time as the financial pressures are unlikely to ease in the near future,” said Heckrath.

Other areas where financial pressure has been felt in this period are: 26% struggled to pay their home loan.

29% struggled to pay their funeral policy premium.

22% struggled to pay their life insurance premium.

19% struggled to pay their shortterm insurance premium.

18% struggled to pay their car loan instalment.