{"id":784469,"date":"2024-07-29T08:00:00","date_gmt":"2024-07-29T06:00:00","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=784469"},"modified":"2024-07-27T20:41:51","modified_gmt":"2024-07-27T18:41:51","slug":"south-africans-are-living-on-the-edge","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/finance\/784469\/south-africans-are-living-on-the-edge\/","title":{"rendered":"South Africans are living on the edge"},"content":{"rendered":"\n

A new report from Sanlam, South Africa’s largest insurer, shows that most South Africans are not prepared for a financial setback. <\/p>\n\n\n\n

The second instalment of Sanlam’s Financial Confidence Index looks at “South Africa’s temperature” regarding the nation’s shared financial confidence. <\/p>\n\n\n\n

It shows that nearly half of the population has a below-average or lower Financial Confidence Index (FCI).<\/p>\n\n\n\n

Overall, South Africans’ FCI remained stable, with an index score of 47 out of 100, with slight improvements in Financial Self-determination and Financial Well-Being. <\/p>\n\n\n\n

\u201cOur research partner, Africa Response, surveyed 1,610 individuals to index three key components of financial confidence: Financial Self-determination (FSD), Financial Resilience (FR), and Financial well-being (FW),” said Mariska Oosthuizen, Sanlam’s Chief Marketing Officer.<\/p>\n\n\n\n

“What stood out was the astuteness and optimism of Gen Z, which had higher FSD and FR than other generations, possibly due to digital savviness opening access to information.”<\/p>\n\n\n\n

That said, the survey showed that just two in five people agreed that they could withstand a financial setback <\/strong>or achieve financial freedom. <\/p>\n\n\n\n

Sanlma said that most people appear to live payday to payday. <\/p>\n\n\n\n

In addition, only half said that they are building wealth and not just paying off debts. <\/p>\n\n\n\n

In addition, just 34% had insurance that adequately covered their financial risks, and only 40% had an emergency fund or savings.  <\/p>\n\n\n\n

“Most respondents do not feel like they could withstand a financial setback. Only half feel in
control of their monthly finances,” said Oosthuizen. <\/p>\n\n\n\n

“This all speaks to South Africa\u2019s persistent household savings crisis, at -1.10% (Q3, 2023) \u2013 compared to Morocco, for example, at 28.3% (according to Trading Economics, April 2024).” <\/p>\n\n\n\n

“When people are living payday to payday, it can feel nearly impossible to save for future setbacks.”<\/p>\n\n\n\n

Moreover, only 42% of respondents said that they have the financial freedom to make choices they enjoy in life. <\/p>\n\n\n\n

“This could foster feelings of sadness, hopelessness, helplessness, anxiety, resentment, envy, self-loathing, etc,” said psychologist Sanam Naran. <\/p>\n\n\n\n

“A lack of financial freedom could also cause a dependence on survival and making ends meet \u2013 this can be incredibly disempowering and have a knock-on effect on an individual\u2019s self-esteem and confidence.” <\/p>\n\n\n

\n
\"\"<\/a>
Source: Sanlam Financial Confidence Index<\/figcaption><\/figure><\/div>\n\n\n

Income pain <\/strong><\/p>\n\n\n\n

When looking at the FCI, a strong correlation exists between income and financial confidence. <\/p>\n\n\n\n

Individuals with earnings under R8,000 a month had the lowest Financial Self-Determination (FSD) index score of 48.<\/p>\n\n\n\n

This was far lower than the index score of 69 for those earnings of R20,000 per month.<\/p>\n\n\n\n

“Low-income earners are often trapped in a cycle of survival behaviours. When you\u2019re struggling to make it to month-end, you become preoccupied with the present, with limited capacity to look to the future.” <\/p>\n\n\n\n

That said, when looking more positively, there was an eagerness amongst respondents to pursue financial learning. <\/p>\n\n\n\n

“Positively, 69% of South Africans said they continuously build their skills to increase their earning power, and 56% said they believe their personal finance competencies are increasing each year,” said Mncwabe.<\/p>\n\n\n\n

“Financial literacy is pivotal to building a life of financial confidence. People have an immense appetite to learn. South Africa\u2019s financial services sector has a duty to keep innovating to make education more accessible.\u201d  <\/p>\n\n\n\n

\n\n\n\n

Read<\/strong>: Things are looking up for employed South Africans<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Sanlam’s Financial Confidence Index shows that many South Africans are living paycheque to paycheque.<\/p>\n","protected":false},"author":95,"featured_media":784495,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11121],"tags":[26,2880],"class_list":["post-784469","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-headline","tag-sanlam"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/784469","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\/95"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=784469"}],"version-history":[{"count":4,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/784469\/revisions"}],"predecessor-version":[{"id":784569,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/784469\/revisions\/784569"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/784495"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=784469"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=784469"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=784469"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}