South African consumers are under extreme financial stress, with all income groups now feeling the pinch of South Africa’s bleak economic prospects, an Old Mutual study has found.<\/p>\n
According to an Old Mutual survey of 1,000 working households, one third of high income earners (R40,000+ a month) are feeling high level of money-related stress, with a fifth indicating they are overwhelmed.<\/p>\n
Higher income groups have historically been able to weather financially straining times, however, rising inflation and worsening economic conditions have led to a tipping point where even the most financially sound households are struggling to make provision for any unexpected economic pitfalls in the future.<\/p>\n
The survey revealed that half of the households covered would be able to find money to cover R1,000 in unforeseen expenses, while only a quarter could manage R5,000, with the rest turning to debt accrual.<\/p>\n
Alarmingly, however, one third of the households said they could not even borrow enough money to cover R10,000 in unforeseen costs.<\/p>\n
To get enough money, should they need it:<\/p>\n
According to Old Mutual, irrespective of household income, when it comes to cutting back on spending, “luxury” purchases are typically the first to go.<\/p>\n
Across all income groups the company found that holidays, eating out and entertaining friends were the biggest casualties when it came to making ends meet.<\/p>\n
This is followed by non-essential purchases such as alcohol, shoes, clothing and beauty products.<\/p>\n
Budget cuts also have an impact on jobs in South Africa, with 61% of households indicating that employing a domestic worker would also be on the list of things to go.<\/p>\n
The table below indications the percentage of households that are cutting back on the listed expense, across the various income levels.<\/p>\n
| Expense<\/th>\n | Less than R6 000<\/th>\n | R6 00 – R13 999<\/th>\n | R14 000 – R19 999<\/th>\n | R20 000 – R39 999<\/th>\n | R40 000 or more<\/th>\n | Total<\/th>\n<\/tr>\n | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Holiday and travel<\/td>\n | 95%<\/td>\n | 94%<\/td>\n | 96%<\/td>\n | 83%<\/td>\n | 76%<\/td>\n | 88%<\/strong><\/td>\n<\/tr>\n| Eating out \/ Entertainment<\/td>\n | 90%<\/td>\n | 93%<\/td>\n | 87%<\/td>\n | 83%<\/td>\n | 71%<\/td>\n | 86%<\/strong><\/td>\n<\/tr>\n | Entertaining at home<\/td>\n | 93%<\/td>\n | 91%<\/td>\n | 85%<\/td>\n | 84%<\/td>\n | 66%<\/td>\n | 85%<\/strong><\/td>\n<\/tr>\n | Alcohol<\/td>\n | 87%<\/td>\n | 83%<\/td>\n | 78%<\/td>\n | 77%<\/td>\n | 57%<\/td>\n | 78%<\/strong><\/td>\n<\/tr>\n | Shoes and clothing<\/td>\n | 88%<\/td>\n | 76%<\/td>\n | 80%<\/td>\n | 66%<\/td>\n | 68%<\/td>\n | 76%<\/strong><\/td>\n<\/tr>\n | Hair and beauty<\/td>\n | 71%<\/td>\n | 71%<\/td>\n | 68%<\/td>\n | 59%<\/td>\n | 49%<\/td>\n | 65%<\/strong><\/td>\n<\/tr>\n | Cigarettes<\/td>\n | 72%<\/td>\n | 66%<\/td>\n | 63%<\/td>\n | 60%<\/td>\n | 57%<\/td>\n | 65%<\/strong><\/td>\n<\/tr>\n | Domestic worker \/ gardener<\/td>\n | –<\/td>\n | 85%<\/td>\n | 79%<\/td>\n | 58%<\/td>\n | 43%<\/td>\n | 61%<\/strong><\/td>\n<\/tr>\n | Food and groceries<\/td>\n | 78%<\/td>\n | 64%<\/td>\n | 56%<\/td>\n | 53%<\/td>\n | 41%<\/td>\n | 60%<\/strong><\/td>\n<\/tr>\n | DStv\/M-Net subscription<\/td>\n | 66%<\/td>\n | 40%<\/td>\n | 41%<\/td>\n | 32%<\/td>\n | 16%<\/td>\n | 38%<\/strong><\/td>\n<\/tr>\n | Payments to children \/ dependents<\/td>\n | 41%<\/td>\n | 37%<\/td>\n | 36%<\/td>\n | 33%<\/td>\n | 28%<\/td>\n | 36%<\/strong><\/td>\n<\/tr>\n | Electricity \/ water<\/td>\n | 37%<\/td>\n | 37%<\/td>\n | 34%<\/td>\n | 33%<\/td>\n | 27%<\/td>\n | 34%<\/strong><\/td>\n<\/tr>\n | Children’s schooling \/ education<\/td>\n | 33%<\/td>\n | 27%<\/td>\n | 24%<\/td>\n | 19%<\/td>\n | 17%<\/td>\n | 25%<\/strong><\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n<\/div>\n | More on\u00a0South Africa<\/h3>\nThe most expensive holiday destinations in South Africa<\/a><\/strong><\/p>\n People are too negative \u2013 South Africa has a lot going for it: investors<\/a><\/strong><\/p>\n How China, Zuma and Nenegate crushed South Africa\u2019s economic growth<\/a><\/strong><\/p>\n |