What South Africans are sacrificing to make it through the month
New data from Old Mutual shows that South Africans are cutting out many expenses to make ends meet.
The 2023 Old Mutual Savings and Investment Monitor (OMSIM) research report found that 53% of respondents do not have enough money for unplanned circumstances, with 62% having no savings buffer that should they not have an income.
For the report, the group monitored financial attitudes and behaviour changes among the country’s working population. Old Mutual conducted interviews with 1,505 respondents of different ages, personal income levels, and genders to gather the data for the study.
Vuyokazi Mabude, the head of knowledge and insights at Old Mutual, said that despite ongoing financial pressure, South Africans are building resilience by prioritising retirement savings, building emergency buffer savings and paying off debt.
On top of this, in the short term, consumers are moving to reduce costs – trimming monthly premiums to help increase household income.
Being more resilient in these financially troubled times means finding ways to stretch budgets. The 2023 OMSIM survey further indicates the following:
- 70% of consumers using rewards and loyalty programmes 66% (2022).
- 40% changing to cheaper TV streaming options.
- 36% switching to cheaper supermarket brands.
- 33% reducing reliance on domestic help.
- 29% moving to more affordable cell phone or data options.
- 29% putting major purchases on hold.
- 27% ending gym memberships.
- 21% opting to repair rather than replace appliances.
- 13% downgrading their rented properties.
- 11% moving their children to less expensive schools.
Attempts to boost household incomes include some South Africans turning to do several jobs.
“Polyjobbers make up 50% of this market, with more young workers (18 to 29 years old) becoming part of this growing trend. The number of young poly jobbers is up from 60% in 2022 to 70% in 2023, with many using social media to supplement their incomes. Generally, however, these inflows are a minor portion of overall incomes earned.”
Although some are cutting out expenses or taking up another job, many South Africans are turning to riskier ways out.
Old Mutual reported that in 2023 there had been a 5% increase in online gambling from 44% to 49%.
The group added that the number of risk-inclined people remained stable in 2023, with those prepared to take substantial financial risk dropping to 21% from 23% in 2022.
Old Mutual added that other statistics reveal that:
- Investment risk appetite correlated with men and younger people being more willing to assume risk.
- Those ready to take above-average financial risks for above-average returns were 28% in 2022 and 27% in 2023.
- People prepared to take average risks to earn average returns grew from 31% in 2022 to 36% in 2023.
- Those unwilling to take any financial risks reduced to 16% in 2023 (2022: 19%).
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