Wonga's 2024 Consumer Spending Survey offers a detailed snapshot of how South Africans manage their finances amid a challenging economic landscape. The survey, which gathered data from nearly 4,500 adults across all nine provinces, reveals critical trends in spending, saving, and financial stress.
Income and Spending Patterns
The average post-tax monthly income of respondents was R14,711, with Gauteng residents reporting the highest average at R15,944 and those in the Free State the lowest at R12,578. Notably, peak earnings were found in the 56-64 age group, averaging over R22,000, while the youngest adults (18-24) earned significantly less.
Despite the variety in income, a significant portion of respondents struggle with financial stability. Around 11% spend more than they earn, and an additional 8% use between 90% and 100% of their income monthly. This overspending is particularly prevalent among lower-income groups, where credit card and loan repayments can consume up to 51% of income for those earning less than R2,500 monthly. In contrast, those earning over R60,000 allocate only 16% to such repayments.
Saving and Retirement
Only 45% of respondents are able to save money, with an average monthly savings of R1,132. Interestingly, younger people are more likely to save, but as they age, the amount they can save tends to increase, despite a decline in the number of savers. A worrying trend is the low rate of retirement savings, with 59% of respondents not contributing towards their retirement. Among those aged 56-64, less than half are saving for retirement, contributing an average of just under R3,000 monthly.
Essential and Discretionary Spending
Housing costs, including rent and bond payments, make up 24% of the average respondent's monthly expenses, with those earning above R30,000 spending around R8,491. The survey also highlights a disparity in grocery spending, where lower-income individuals (earning less than R7,500) spend less than R1,000 monthly on food, which constitutes a significant portion of their income. Conversely, those in higher income brackets spend over R4,600, although this represents a smaller fraction of their total earnings.
Impact of Inflation and Adjustments
The survey indicates that 84% of respondents have noticed a significant increase in food and grocery prices, with electricity (54%) and fuel (33%) also being significant contributors to rising living costs. To cope, many are cutting back on non-essential items like clothing (44%) and home entertainment (25%), as well as reducing spending on food and groceries (32%) and personal loans (32%).
So what do these results tell us?
These survey findings highlight a financial landscape where many South African’s face significant challenges in managing their finances. There is an undeniable need for better financial planning and support to help foster a more financially secure population, especially as cost-of-living pressures continue to mount. This is, of course, easier said than done
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