Bronwyn Fourie
DURBAN: Finance gurus have issued stern warnings to consumers before the festive season as research reveals that most have no intention of cutting back their spending in line with the tough economic climate.
Some consumers are already mentally spending their 13th cheques, while others will buy items on credit before being paid.
A recent survey – the Acentric Christmas Shopping Intentions Survey 2014 – revealed that 34 percent of the country’s middle- and upper-income consumers had already planned to spend more money this festive season than they did last year, while 36 percent were going to spend the same. Only 26 percent planned to cut back.
The South African Savings Institute said people had continued spending more than they earned this year – despite an environment of growing inflation and rising interest rates.
“Consumers are also tempted by offers of credit such as store cards and short-term loans. They then mismanage this debt, incurring high interest rates and becoming further indebted.”
Aneesa Razack, head of strategic growth at FNB Investment Products, advised consumers, even those without bonuses, to take stock of their financial situations before splurging on holidays.