Durban - WITHIN five days of receiving their salary, 56% of middle-income consumers spend their monthly income.
That's according to CEO of FNB Retail, Raj Makanjee.
Middle-income consumers earn a gross monthly income between R7 000 up to R60 000.
According to Makanjee, for many consumers, it’s not only a matter of living from one salary payment to another, but the reality is also that their monthly salary just doesn’t last for 30 days.
“These consumers tend to struggle with money management, with the shortfall leading to sacrifices in important areas such as having back up or emergency saving that can be used to pay for unforeseen expenses.”
He added: “High spending and limited savings cause consumers to rely on credit to get through the month, making them more vulnerable to be caught in a debt trap.”
While the festive season is around the corner, the bank has put together a few tips for consumers to ensure their spending does not send them into debt:
- Print bank statements, skipping debit orders and making regular or large cash withdrawals add to your bank fees. Instead, check your statements on a banking app or online, stick to recommended free withdrawal limits or withdraw at a point of sale at a fraction of the cost while making purchases.
- Synchronise your savings to your salary date and schedule an automatic transfer to a cash investment account on the day or day after your salary gets paid into your transactional account. This removes the temptation of spending the money if it was still available in your day-to-day account.
- Building up savings that you can access in case of emergencies is crucial, hence it’s important to prioritise an emergency savings account which can act as a buffer or safety net to help you avoid the need to take out additional credit to pay for unforeseen expenses.