PERSONAL FINANCE: A Look at South African Spending Habits
According to figures on South African spending habits from Stats SA, SA households spend more on clothing and footwear than on education or health. 4.5% of monthly earnings goes towards clothing while only 2.7% is spent on education and 1.4% on health. A lot of money is being spent on the upkeep of lifestyles and upholding a certain level of societal status.
South Africans often suffer from severe cases of poor spending habits, which can lead to financial crises as well as a crisis in their own personal lives. Debt can cause an honest person to lie, cheat and even steal. It could cause serious feelings of anxiety, stress and anger, loss of assets, depression and even suicide.
But what exactly are the poor South African spending habits that people are continuously getting themselves into? One of the biggest dilemmas that South Africans struggle with is poor budgeting. Research shows that South Africans have a serious problem with budgeting and planning for the future and this results in poor spending habits.
With no average budgeting system in place, the next ‘best’ thing to do is to turn to the (in)famous piece of plastic - the credit card. More South Africans are overusing their credit cards to buy things that they cannot afford. By using their credit cards, they often forget that they need to pay back almost double the amount that’s being lent to them and in most cases they simply cannot afford to pay it back.
There are solutions to these bad South African spending habits which those in debt (or on the verge of debt) could do really well to adopt:
- By planning a budget, you will enable yourself to know how much money you have at your disposal.
- Budgeting also evaluates your income and expenses and it allows you to prioritise your most important expenses.
Since South Africans are generally lovers of status, there are definitely ways to save money that is being wasted on designer clothing.
- Buying merchandise when it's going out of season helps you save money. You can buy next year’s winter clothing at the end of the season when you pay much less for them.
- South Africans need to take into consideration the costs of owning a vehicle and must not spend every rand, which they have managed to save, on a car. Most importantly, never purchase a car that you can't afford to maintain. The majority of South Africans want their cars to be brand new. However, your budget and other personal needs are going to have the final say as to whether your car is new or used.
According to the country's credit regulator, 1 in every 6000 South Africans applied for counselling every month in 2012 to help handle their debts. With regards to dealing with debt, help is available for South Africans managing debt, but the best cure in this instance is prevention.