Data from FNB has laid bare the financial crunch facing South Africans, with the lender saying it only takes five days for a middle-income consumer to spend up to 80% of their monthly salary.
The bank said its estimates suggests that consumers earning between R180 000 and R500 000 per annum live hand to mouth, surviving on 20% of their monthly income three weeks in a month.
High indebtedness of consumers also featured prominently, with FNB saying middle-income consumers with secured and unsecured credit spend, on average, 30% of their income on unsecured credit and 35% on secured credit.
Raj Makanjee, CEO of FNB Retail, said the average consumer is stretched financially.
“The trend also points to a continued culture of consumption, leaving con-sumers with little to start saving and investing for financial independence,” he said.
FNB provides the following five tips for consumers to stretch their rand further
- To reduce your fuel bill, plan your trips on a weekly basis.
- Create a weekly menu to know what groceries you’ll need. If possible, get it delivered to help save on your fuel spend.
- Eating out and take-aways are always a great treat, but can you possibly reduce your spending in this category?
- Go through your monthly spend on TV and streaming services and see if there are any you aren’t using regularly.
- Where possible, buy your winter clothes in summer and your summer clothes in winter. You’ll find items on sale during the change of season.
- Review all your short-term insurance policies and make sure that your car’s value is insured correctly.
- You need to take the time to understand what your “needs” and “wants” are. This will help you to be aware where you need to spend your money, and where you want to spend it.
Advice on what consumers can do to supplement their incomes.
- If you have extra room in your house or a garden flat, investigate the possibility of renting it out.
- Your hobby can help you generate extra income. Maybe you like baking or are a good photographer.
- Start a side hustle using the skills you already have.
“Our culture of consumption stems from our instant gratification needs. This can have dire financial implications. We buy things we want with money we don’t have, not thinking of the long-term implication of making this decision. Before you buy anything, ask yourself one question: is this a need or a want? Asking this question will help you build a future for yourself and your family,” Makanjee said.
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