The exact moment usually changes but it always begins with you staring at the calendar intently, trying to work out if the 25th falls over a weekend. “If it is on a Saturday,” you ponder, “will I be paid on the Friday or will I have to wait until Monday?”
If the 25th falls on a Sunday, you know payday will only come on Monday. Then, the backwards counting begins and calculations are made to figure out how many days of desperation lie between yourself and the paycheque.
Right now, most households are under the same amount of pressure as in 2009. To put this in context, 2009 was a recessionary year for South Africa following the global credit crunch.
We did well to miss the biggest part of the global economic fallout, but it seems as if most middle class households are heading for bad times. The latest TransUnion Consumer Credit Index shows that we are still living on our credit cards to make it to the end of the month.
At the moment, the index shows that credit accounts three months in arrears have increased by 13% year on year. This is risky business. Living from month to month is living in a house of cards. In the end, all the data points to one conclusion: households are running out of money and we are sitting with a cash flow situation similar to 2009.
But the situation may be even more dire if you take into account that the FNB/BER Consumer Confidence index for the third quarter was at a decade low. In other words, consumers do not see any light at the end of the tunnel anytime soon.
It is alarmist to say that the middle class will collapse in its entirety. But it is safe to say that every household that drops out of the middle class is a risk to the entire economy. This is because consumer spending still largely drives the economy.
There are two ways to look at the pressure households are under, the first being that we simply live beyond our means and that we misconstrue what the middle class actually is. But what do you say to the household that has been conservative with its money – the middle class consumers who have had to watch what little fat was left over at the end of month disappear?
The answer: “piggy bank”. The middle class has been the piggy bank for South Africa. The bottomless pit of money that can be called upon whenever the macro-economic tide turns. The state and big business must take it easy with that hammer – there are only so many times you can glue the piggy bank together again.
That is why, when Sanral says “82,83% (of motorists) will pay less than a R100”, I laugh. What R100? It’s gone!
The municipal rates and taxes increase has taken it all…