In order to deal with the harsher economic environment, 70% intend to supplement their income in the next three months; 21% are going to get a financial facility such as a loan or overdraft and 10% are considering letting their policies lapse.
According to Gary Greenfield, managing director at Interact RDT, “The most significant decrease in spending is on investments with 36% of the people we surveyed reporting that they have cut back in this category. Medical aid is also taking a knock with one in every four saying they have reduced their cover. While this may help alleviate short term pressure, it has an extremely negative impact on the long term financial security of South Africans.”
The online survey was conducted nationally amongst 400 consumers with an average household income between R5 000 and R50 000 to understand how they are coping in the current economic environment and how this has affected their household income distribution. The majority of the respondents are urban dwellers from the major metropolitan areas.
Almost half of South Africans are spending more on basic living essentials such as transport (48%) and food (48%). Municipal expenses (40%), school fees (35%) and servicing debt (29%) are also taking up a major portion of South Africans' wallets.
“There appears to be a continued focus by South Africans on spending their money on cars and cell phones and an admission that not enough is being spent on lowering their debt or securing their future.”
The greatest priority is given to buying food and groceries, followed by servicing bond or rental commitments. Transport costs rank third in importance while car repayments, at 11th, receive a very high allocation of income. Respondents ranked investments as the lowest priority yet they feel the amount they contribute is not sufficient.
Where disposable income is available, a premium is prepared to be paid for medical aid, school fees and food. And as disposable income increases, South Africans claim that they will still allocate personal expenses before debt and medical.
“As more money becomes available, the number one priority for South Africans would be to take a holiday. Ranked second is an increased spend on investments.”
This is the first of what is to become a quarterly spend tracker survey of how South Africans spend their money and see their future. “We believe that this survey provides a unique insight into how South Africans spend their hard earned cash.”Click Here - to see an abstract of Interact's Spend Tracker results. About Interact RDT
Interact RDT (which stands for Research Design Technology) offers a range of consumer experience research and consulting services designed to develop true loyalty from within a customer base.