This is how South Africans are dealing with their financial woes

South Africans are all dealing with their financial woes in different ways, but financial stress is taking its toll on consumers.

Nearly 90% of them are stressed and 60% extremely stressed, not surprising given that they just emerged from a pandemic before they were thrust into a worsening cost-of-living crisis.

Record-high food and fuel prices, an inflation rate at a 13-year high and rising interest rates are causing both middle- and low-income earners countrywide to struggle financially and a Sanlam survey focusing on the impact of money – or rather insufficient money – on our mental health, indicates just that.

The majority of the 1 200 respondents are stressed about their financial situation, yet many are not taking it lying down. Instead, they are proactively trying to better their circumstances and deal with their financial woes. Numerous participants indicated they are trying as hard as possible to budget and save, with some starting a side hustle in an effort to earn extra income, while others are upskilling themselves on all things financial to improve their money management.

Only 30% of the respondents admitted to ignoring their money problems in the hope that it improves or goes away. “In true South African style, the majority are trying their best in a difficult situation. We can see that even those who are unable to save every month see the value of saving,” says Farzana Botha, segment solutions manager at Sanlam Savings.

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Encouragingly, only 19% of respondents claimed not to have a budget and Botha says she hopes this means that the importance of savings and budgeting is reaching more people than before. Another encouraging outcome was the number of consumers who were taking direct responsibility for their own finances, with only 5% deferring to their partner to manage their finances.

Unfortunately, only 19% feel prepared or completely prepared to cover their day-to-day living costs, with only 16% prepared to meet their future financial needs, with most saying they do not have enough money to save for the future. They either live for the short-term or get themselves more and more into debt trying to make ends meet.

“There is no doubt that we have a very stressed nation and this has far-reaching consequences for individuals, families, communities and South Africa as a whole. “Therefore, we want to empower consumers to make sound financial decisions despite these mounting challenges, especially when it comes to having savings for emergencies and preparing for retirement,” says Botha.

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Key findings from the survey

• 50% reported being short every month and that they rely on debt or loans to help see them to month end
• 66% have a budget, but only 18% always stick to it
• Only 19% feel prepared or completely prepared for their day-to-day living costs
• Only 16% are prepared for future needs
• 35% have no additional cash and do not save
• 16% save when they get an extra windfall or bonus
• 16% are only able to save every couple of months
• 14% save the same amount every month
• Nearly 90% feel stressed due to their finances, with 60% extremely stressed
• 78% feel anxious and depressed as a result of their financial stress
• Financial stresses dwarf other stresses regardless of income, with 78% saying that they are worried about finances
• 50% also claim that money issues have an impact on their physical health
• Relationships are also affected and 40% have withdrawn from those close to them.

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“Only 7% reported seeking advice from a financial planner or broker. It is so important for people to speak with a financial adviser to help them create a financial plan with goal specific outcomes. After all, every day is a new chance to make better financial decisions,” says Botha.

She points out that the toll that financial stress is taking on our mental health is of great concern, with 78% of respondents saying they feel anxious and depressed about their money situation.

“This is where financial self-care is so vital. This means finding healthy ways to deal with your financial woes, manage your finances, developing healthy money habits, and supplementing your income where possible,” Botha says.