Rent or bond costs; loan repayments; medical aid; food and groceries; and school fees are the most expensive things that South African consumers are spending their money on.
This is according to the Consumer Spending Survey 2024 by Wonga.
In this survey, close to 4,500 South African adults over 18 years old, with incomes ranging from under R2,500 a month to over R1000,00.
Consumers are spending:
– 24% of their income on rent or bond costs each month
– 19% of their income on loan repayment costs each month
– 13% of their income on medical aid costs each month
– 11% of their income on food and groceries each month
– 10% of their income on school fees each month
James Williams, head of Marketing, Wonga said that private medical care is a luxury that many South Africans cannot afford and the results show in the survey.
“Only 16% of the total number of respondents listed medical aid as a monthly cost, but for those who do have it, it reflects as one of the top three of an individual’s largest expenditures,” Williams said.
What is also worrying is that the second cost biggest cost after rent or bond costs were paying back personal loans.
“For those that are paying off credit cards and loan repayments, it is worrying to see that repayments can rise to as much as 51% of their salary for those earnings R2,500 or less month,” Williams said.
Cost of living
As the cost of living rises, majoriity of the respondents said that three expenses increased the most recently including: food and groceries (84%); electricity (54%); and fuel (33%).
Williams said: “This shows the impact the high inflation environment has had on FMCG prices, and how interlinked electricity and fuel prices are on the production of food and groceries. It’s the perfect storm.”
Along with the expenses that have increased the most, respondents also named the things that they are cutting back on to save costs.
Along with luxuries such as clothing, home entertainment and recreational activities, 32% of respondents reported that they need to cut back on food and groceries as they tightened their belts.
Things that people are not cutting back on include: savings, insurance, medical aid, school fees and home security being seen as they are seen as essentials.
Spending patterns
The survey showed that 60% of respondents are supporting dependents under the age of 21, with the average spend per dependent being R972, excluding school fees.
“What is also concerning is that around one in ten (11%) of the respondents indicated that they were spending more than they earn every month,” Williams said.
“A further 8% reported that they are spending between 90% and 100% of their income per month, with the majority of them being in the lower income bands.”
As survey respondents report that are living month to money, around 55% of respondents are unable to put away any savings each month.
Williams said: “When looking at savings per income band, the lower income bands are not surprisingly far less likely to be able to save each month. This is worrying as they are also the most vulnerable in our society.”
While South Africans are saving, 59% of respondents are not saving towards retirement, with the average retirement contribution sitting at just R1,206 per month.
Even more alarming is that less than 50% in the 56 to 64 year old age group are saving anything for their retirement years.
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