{"id":187585,"date":"2017-07-24T18:30:54","date_gmt":"2017-07-24T16:30:54","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=187585"},"modified":"2017-07-24T17:30:28","modified_gmt":"2017-07-24T15:30:28","slug":"what-is-your-financial-limit-how-many-south-africans-can-afford-a-r50000-emergency-in-2017","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/banking\/187585\/what-is-your-financial-limit-how-many-south-africans-can-afford-a-r50000-emergency-in-2017\/","title":{"rendered":"What is your financial breaking point &#8211; How many South Africans can afford a R50,000 emergency in 2017"},"content":{"rendered":"<p>Research published by financial services group, Old Mutual, shows how many South Africans would be adequately prepared for a one-off financial shock of various denominations, ranging between R1,000 and R100,000, given the decline in the macroeconomic environment over the past year.<\/p>\n<p>In its Key Savings &amp; Investment Trends report 2017, Old Mutual found that\u00a0most households are under immense pressure and making it from pay day to pay day is a fine balancing act.<\/p>\n<p>The research is comprised of interview among working South Africans living in major metropolitan areas, and examined attitude to finances in general and savings in particular.<\/p>\n<div>Old Mutual used the following 5 income brackets:<\/div>\n<ul>\n<li>Less than R6,000 &#8211; <strong>22%<\/strong><\/li>\n<li>R6,000 \u2013 R13,999 &#8211; <strong>28%<\/strong><\/li>\n<li>R14,000 \u2013 R19,999 &#8211; <strong>14%<\/strong><\/li>\n<li>R20,000 \u2013 R39,999 &#8211; <strong>22%<\/strong><\/li>\n<li>R40,000-plus &#8211; <strong>14%<\/strong><\/li>\n<\/ul>\n<div>Old Mutual said that, while there are claimed improvements &#8211; at least on 2016 &#8211; as regards ability to get by and stress levels, more objective measures such as the ability to cope with an unforeseen\u00a0 expense of a defined monetary amount indicate that the bail point at which households put up their hands and say &#8220;we can\u2019t handle this&#8221;, is coming even earlier for all income groups other than those in the R40 000+ earnings bracket.<\/div>\n<div>\n<p>In 2017, at total market level, all bar 1% working households can handle an unforeseen expense of R1,000. At R100,000 the vast majority (85%) would not be able to handle this sudden shock.<\/p>\n<\/div>\n<div><a  data-lightbox=\"post-image\" href=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2017\/07\/OldMutual-e1500904659484.png\"><img loading=\"lazy\" decoding=\"async\" class=\"aligncenter size-full wp-image-187605\" src=\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2017\/07\/OldMutual-e1500904659484.png\" alt=\"\" width=\"650\" height=\"268\" \/><\/a><\/div>\n<div><\/div>\n<div>Below are the descriptions on how various households (across different income levels) would go about financing a financial shock.<\/div>\n<div><\/div>\n<div><strong>Household income less than R6,000:<\/strong><\/div>\n<ul>\n<li>Friends, savings, and to a lesser extent stokvels, are the go-to sources for an unexpected expense of R1,000 in very low income households.<\/li>\n<li>The tipping point comes earlier in 2017 with 42% unable to cope with an expense of R5,000.<\/li>\n<\/ul>\n<div>\u00a0<strong>Household income R6,000 \u2013 R13,999:<\/strong><\/div>\n<div>\n<ul>\n<li>Friends and savings are the primary sources for a R1,000 unforeseen expense.<\/li>\n<li>Formal loans gain traction at R5,000, although access\/reliance on personal loans\u00a0shows a declining trend for amounts of R10,000 and over.<\/li>\n<li>Over half cannot cope with an unforeseen expense of R10,000.<\/li>\n<li>At R50,000 the vast majority of households in this bracket can\u2019t cope<\/li>\n<\/ul>\n<\/div>\n<div>\n<div><strong>Household income <\/strong><strong>R14,000 \u2013 R19 ,999:<\/strong><\/div>\n<ul>\n<li>Savings are the primary source for expenses of R1 000 whereafter borrowing steps in.<\/li>\n<li>As the amount of the expense climbs, so borrowing from friends and family drops off in favour of institutional borrowing.<\/li>\n<li>This income group is more resilient, and while \u201cbail out\u201d points are earlier than in 2016, they are only marginally so.<\/li>\n<\/ul>\n<\/div>\n<div>\n<div><strong>Household income <\/strong><strong>R20,000 \u2013 R39,999:<\/strong><\/div>\n<ul>\n<li>Credit card continues to be used extensively up to R10,000.<\/li>\n<li>Formal loans popular especially for amounts in R10,000 \u2013 R50,000 range.<\/li>\n<li>Only half could handle an expense of R50,000 and 1 in 4 bail at R10,000.<\/li>\n<\/ul>\n<\/div>\n<div>\n<div><strong>Household income R40,000+<\/strong><\/div>\n<ul>\n<li>Credit cards are very popular for amounts up to R10,000.<\/li>\n<li>Low incidence of loans from family\/friends, with preference for formal loans for larger amounts.<\/li>\n<li>Home loans also remain popular for amounts north of R50,000.<\/li>\n<li>Resilience levels fairly steady.<\/li>\n<\/ul>\n<\/div>\n<hr \/>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/business\/183965\/more-than-a-third-of-south-africans-have-a-side-job-heres-what-theyre-doing\/\" target=\"_blank\" rel=\"noopener\">More than a third of South Africans have a side-job \u2013 here\u2019s what they\u2019re doing<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Research published by financial services group, Old Mutual, shows how many South Africans would be adequately prepared for a one off financial shock, given the decline in the macroeconomic environment over the past year.<\/p>\n","protected":false},"author":10,"featured_media":176825,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[961],"tags":[1110],"class_list":["post-187585","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking","tag-old-mutual"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/187585","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=187585"}],"version-history":[{"count":10,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/187585\/revisions"}],"predecessor-version":[{"id":187665,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/187585\/revisions\/187665"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/176825"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=187585"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=187585"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=187585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}