Overwhelming financial strain sees 94% of South Africans struggle as festive season approaches

As the festive season approaches, a profound sense of financial hardship envelops South Africa, as evidenced by alarming statistics from a recent survey conducted by Debt Rescue.

With 94% of respondents reporting dire financial strain, the nation is gearing up for celebrations that many simply cannot afford.

The survey sheds light on the reality of consumer finances during this traditional time of giving and spending.

With more than two-thirds of participants admitting to either merely coping (39%) or experiencing severe financial pressure (32%), it becomes painfully clear that festivities may be grounded by economic woes.

Disturbingly, 39% of households indicate they cannot celebrate the festive season at all this year.

Neil Roets, CEO of Debt Rescue, who frequently warns about the financial plight facing ordinary citizens, expressed grave concern over these findings.

“When households cannot scrape together a few extra rands to celebrate this crucial period, there is reason for serious alarm,” Roets said.

Festive plans halted

The survey also revealed that about two-thirds of participants have had to drastically alter or cancel their festive plans entirely.

Roets said, “It is heartbreaking how financial hardship is reshaping our festive traditions, which hold immense cultural significance across communities.”

As the cost of living continues to rise starkly, many families find themselves in a precarious financial position, forced into tough choices about which necessities to prioritise.

Current statistics show that over 23 million South Africans – more than a third of the population – are living below the lower-bound poverty line, as defined by Statistics South Africa, earning less than R1300 per month.

The situation is exacerbated by the recent Household Affordability Index from the Pietermaritzburg Economic Justice and Dignity group which reports that average workers spend over 60% of their monthly earnings on transport and electricity alone, leaving little for other essential expenses.

Worries over rising costs

Food inflation has emerged as the primary concern for most households, with over half of respondents highlighting grocery expenses as a source of festive anxiety.

“Food has become the cause of festive stress among families, outpacing all other financial worries,” Roets added.

As families navigate this financial tightrope, the survey highlighted that 65% of participants acknowledged that festive spending contributes to their long-term financial struggles.

This phenomenon leads to overspending and accumulating more debt instead of relieving stress for the holidays.

Additionally, 61% of respondents feel pressured to spend money they don’t have, which could worsen their financial situation in the coming months.

Most concerning is that 77% of those surveyed do not expect any bonuses to alleviate their financial burdens.

However, there appears to be some silver lining; 40% of the respondents revealed they would be cutting back on festive spending compared to last year, signifying a shift towards financial prudence.

"This behaviour reflects a reality check among citizens already grappling with debt,” Roets said

Advice for a cautious festive season

The National Credit Regulator (NCR) has cautioned the millions of South Africans facing over-indebtedness to exercise caution during the festive season.

“Consumers should stick to budgets, prioritise essential purchases, and avoid enticing credit schemes,” advised NCR's Alfred Matsimbi.

Roets echoed this sentiment, urging individuals already in a debt cycle to be judicious with their festive spending and to enter the New Year without the typical January financial woes.

He encourages those struggling with debt to consult registered debt counsellors, citing their success in assisting many overwhelmed consumers.

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