A study by First National Bank (FNB) estimated that it takes an average of five days for a middle-income consumer to spend up to 80 percent of their monthly salary.
The study suggests that the average middle-income consumer, earning between R180 000 and R500 000 per annum, survives on 20 percent of their monthly salary for more than 20 days in a month.
The bank’s money management product head Ester Ochse says that their findings further show that on average, consumers spend 65 percent of their income on servicing debt.
Ochse says, “So, 30 percent on unsecured credit, which are things like your personal loans, temporary loans, overdrafts, that type of thing, and then 35 percent on your secured credit, which goes to your vehicle finance, and home loans as well.”
“You know if you look at the overall spend, those show that consumers are very stretched financially, and there’s not a lot of wiggle room for them to do things like saving for emergencies or alternatively, longer-term financial goals,” says Ochse.