A new report shines the spotlight on what we do with our money, the debt burden we sit with, and how many of us are able to save.
The cost of living is climbing, and people are borrowing more to bail themselves out; and while many do have a monthly budget, 76% still run out of money before the end of the month.
This is one of the key findings in the World Wide Worx “More Month Than Money” survey commissioned by TymeBank.
“We know that many South Africans struggle to save, but through sharing the insights from this study, we hope to help consumers take control of their money so they can work towards their goals and reach their full potential,” said Tauriq Keraan, deputy CEO of TymeBank.
The survey found that 43% of people borrow money to get through the rest of the month after they run out.
Only 9% of those surveyed turn to banks to help them make it through the month, 20% use credit cards and 59% resort to borrowing money from family and friends.
So where is our money going?
Housing (41%) and groceries (24%) are the first things we spend our money on. This is followed by transport costs (10%) and school fees (8%). Spending on clothing and security come in last, the report found.
“The survey shows that our priorities are in the right place, as we’re spending on the Big Three first – housing, groceries and transport,” said Keraan. “However, it also shows that while debt is not the first expense to be paid, it constitutes a major portion of our monthly expenditure.”
According to the survey’s findings, 40% are spending between 41 – 100% of monthly income on servicing debt, this includes bond repayments, loans, store cards and credit cards. If married or having moved in together, and earn more than R10,000 a month, this is most likely to be the reality.
“After paying these big ticket items, 57% of us don’t make it much further into the month; by the 15th we’ve run out of money and are back to borrowing. This makes us feel frustrated (51%) and helpless (35%),” the report said.
And while 24% are self-disciplined enough not to purchase any luxuries with the money we borrow, the rest keep on buying non-essentials even when broke: 17% buy takeaways, 16% go clothes shopping, 12% socialise, 12% eat out, 11% buy alcohol and 5% get their hair and nails done.
These findings align with the latest Old Mutual Savings & Investment Monitor which was published on Monday (15 July). The monitor found that 42% of respondents said they struggle to make ends meet each month, while 73% said they are constantly worried about having enough money.
More than half (58%) said they do not feel financially secure enough to cover an unplanned emergency, and the majority (60%) do not feel confident that government will be able to provide for them and their families if they cannot do it themselves.
When it comes to saving money every month, Old Mutual’s data shows that irrespective of household income, people are now looking how to cut back on the basics – with cheaper food and clothing topping the list.
Households are also cutting back on entertainment and entertaining, reducing how often they go out, or have friends and family over for a social gathering.