SOUTH Africans are feeling high levels of financial stress, which is also negatively impacting their health, their home and work lives, according to the Money-stress Tracker.
This is a survey of more than 14 000 participants run by South African debt counsellor DebtBusters.
Despite this, most were trying to deal with the problem themselves rather than seeking professional help.
According to this survey released this week, which DebtBusters said was one of the largest surveys ever done in South Africa to determine how money-related stress impacts other aspects of life, some 70 percent of respondents said they were experiencing financial stress. Of these, 94 percent felt this was impacting their home life and 77 percent their work life. Some 76 believed it was affecting their health.
The respondents polled had subscribed to the DebtBusters’ website, but were not currently undergoing debt counselling.
Generally, women were more stressed about their finances, home and work life and health than men. In particular, women were 30 percent more likely than men to be stressed about their health as a result of financial stress and 20 percent more worried about paying their debt each month compared to men.
Nosiphiwo Nxawe, the manager of payments at DebtBusters, said this highlighted the burden that comes with the critical role women played in South African society and was something to consider as the country approached Women’s Day.
Over half of participants (52 percent) indicated they felt stressed or anxious about running out of money before the end of the month. Other major financial stresses were struggling to pay off debt each month (36 percent), concerned about inflation (27 percent), worrying about unexpected expenses (23 percent), battling to pay school fees (15) and worrying about having enough to retire (12 percent).
Perhaps unsurprisingly, financial stress was most acute among the younger respondents and those with less income. However, 40 percent of all respondents were spending over half their take-home pay to repay debt.
Nxawe said more alarmingly, 72 percent of all respondents needed 30 percent or more of their take-home pay to repay debt. “If one considers that DebtBusters deems 30 percent of take-home pay to be the level at which debt repayments can be managed sustainably, one can conclude that 72 percent were in an unsustainable debt position. This is simply untenable, so it’s not surprising that stress levels are so high,” Nxawe said.
One in six people believed that they had less debt than their peers, while five in six believed they had the same or more debt. Under 25s generally believed that others had more debt than they did.
Reactions to dealing with financial stress ranged from cutting back on monthly expenditure to selling personal items, with most people (43 percent) opting to tighten their belts. Some 26 percent looked to increase their income by finding a better job. Unsurprisingly, younger people were more likely to seek higher-paying jobs. However, one in six (14 percent) said they felt stuck and did not know what to do.
When asked why they had not acted to alleviate financial stress, 39 percent responded they ‘felt stuck’, and 23 percent said they needed more time to think.
Psychotherapist and Transactional Analyst Diane Salters said people seeking debt counselling were probably going to feel shame and fear, not be thinking clearly and ready for fight, flight or freeze.
“Those in freeze mode will likely feel stuck. Many responded this way in the survey. Those who are in flight mode will say they don’t need debt counselling when the overall numbers saying they are experiencing the effects of financial stress on their lives indicate they do. If they freeze, they will do nothing. Or they may be ready to flee or fight the debt collector, their partner or spouse or even their debt counsellor.”
Nxawe said comments from respondents who were currently under debt counselling reflected the informal feedback DebtBusters received from clients. “Once the decision is made (to proceed with debt counselling), most people feel an immense sense of relief. The fact that once in debt counselling, they aren’t constantly having to answer phone calls about outstanding payments also helps alleviate a lot of the stress.”
Meanwhile, DebtSafe’s latest (June 2022) “South African Consumers’ Financial Reality” survey statistics and feedback was said to portray a cheerless picture of the current state of consumers’ finances.
According to Carla Oberholzer, DebtSafe’s debt adviser and registered Debt Counsellor, the struggle was real as South African consumers’ biggest financial concern was not being able to save for anything.
The 1400-plus participants of DebtSafe’s “South African Consumers’ Financial Reality” June 2022 survey results also provided various insights concerning their current financial situation.
“Consumers are experiencing dire financial times, and thus, #SavingsMonth is no celebration this year. With the escalating living costs and bills upon bills, one can understand why saving does not take priority when South Africans are fighting to survive. The biggest financial concern consumers currently have is that they cannot save for anything and the main reason is the high cost of living,” Oberholzer said.
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