Financial services group FNB estimates that it takes an average of five days for a middle-income consumer to spend up to 80% of their monthly salary.
This suggests that the average middle-income consumer, earning between R180,000 – R500,000 per annum, survives on 20% of their monthly salary for more than 20 days in a month.
In addition, salaried middle-income consumers with secured and unsecured credit spend, on average, 30% of their income on unsecured credit and 35% on secured credit, the lender said.
According to Raj Makanjee, CEO of FNB Retail, this is one of the indications that the average consumer is stretched financially.
“The trend also points to a continued culture of consumption, leaving consumers with little to start saving and investing for financial independence,” he said.
“In keeping with our efforts to help our customers better manage their money, we’ve invested heavily in the last decade in platform-based tools like our nav>> Money and our eBucks Rewards programme have provided immense support to customers, paying out over R16 billion in the last 20 years,” he added.
“As part of our commitment to providing integrated financial services through assisted and unassisted channels, we are also transforming our retail offering to provide customers with integrated advice, helping them to unlock financial capacity in their lending and transactional activities to be able to save, invest, and protect themselves and their families.
“By democratising access to advice, we can assist more customers in securing a brighter financial future,” Makanjee said.
Senzo Nsibande, CEO of FNB Money Management said money management tools such as nav>> Money on the FNB App can be used for free and currently has more than 2 million active users.
“By evaluating all aspects of their finances, consumers can stretch every rand beyond its potential. This may allow them to begin accumulating cash savings for emergencies and better plan for lifelong decisions such as a comfortable retirement.”
The data compares to similar data published in 2018 by FNB which showed that more than half (56%) of middle-income consumers spent their entire monthly salary in five days or less after receiving it.
FNB categorised middle-income consumers as those who earn a gross monthly income of between R7,000 up to R60,000.