A recent survey of South African working households has found that consumers are under extreme financial pressure, with all income groups now feeling the pinch given the current economic climate. The Old Mutual survey of 1 000 households found that even those in the highest income bracket earning R40 000+ every month were still feeling high levels of money-related stress, with a fifth admitting to being overwhelmed.<\/p>\n
This finding is particularly surprising given that the highest income groups have historically been able to weather the storm financially, even during the toughest times. However, now rising inflation and slowing wage growth has pushed even the wealthiest South Africans to breaking point, with many households simply unable to save for the future.<\/p>
Plans to pay for unforeseen expenses<\/strong><\/p>\n When households are feeling the strain financially and are unable to save for the future, it is those unplanned expenses that can really push them over the edge. Alarmingly, even with access to fast cash, one-third of the households surveyed said they would struggle to borrow enough money to cover R10 000 in unforeseen * Borrow from family (56 per cent)<\/p>\n * Tap into savings (30 per cent)<\/p>\n * Miss a payment and make it when they can (26 per cent)<\/p>\n Sacrifices have to be made<\/strong><\/p>\n With wage growth struggling to keep up with inflation, an increasing number of South African households are having to make sacrifices as they see their income, in real terms, fall. And, when it comes to cutting back on spending, it is the luxury items that are understandably the first to go.<\/p>\n Across all the income groups to respond to the survey, it was found that non-essential purchases such as holidays, eating out and entertaining friends were the first casualties when it comes to cutting costs. Next on the list are expenses like clothing, shoes, alcohol and beauty products.<\/p>\n The following list shows the luxury items and the proportion of the households canvassed that will be going without this year:<\/p>\n * Holiday and travel \u2013 88 per cent<\/p>\n * Eating out \/ Entertainment \u2013 86 per cent<\/p>\n * Entertaining at home \u2013 85 per cent<\/p>\n * Alcohol \u2013 78 per cent<\/p>\n * Shoes and clothing \u2013 76 per cent<\/p>\n * Hair and beauty \u2013 65 per cent<\/p>\n * Cigarettes \u2013 65 per cent<\/p>\n * Domestic worker \/ Gardener \u2013 61 per cent<\/p>\n * Food and groceries \u2013 60 per cent<\/p>\n Are you going to have to make sacrifices this year? If so, what items will you do without? Please share your thoughts in the comments section below.<\/p>\n
\nOf the 1 000 households canvassed, half said they would be able to find R1 000 to cover an unforeseen expense, while only a quarter said they would be able
\nto pay an expense of R5 000 or more.<\/p>
\ncosts. Faced with this type of expense, respondents said they would:<\/p>\n