South Africans’ levels of financial stress have remained elevated for the past three years, thereby affecting their home and work lives as well as their health, according to the DebtBusters’ third annual Money Stress Tracker survey.
The data drawn from the responses of 26 000 registered users of www.debtbusters.co.za who were not in debt counselling also showed that younger people and those with less income were the most anxious, with particularly women carrying the burden of financial stress.
Older people and those in the higher income bands are least worried but have the highest levels of unsustainable debt and are less likely to seek help.
Benay Sager, executive head of DebtBusters, said the long-term implications of this was probably not great from a psychological perspective, as these individuals, particularly younger generations, would feel stress and anxiety not only towards finances, but also in many other facets of life for years to come.
“I think they’ll probably need to come to terms with their new normal – if there is such a thing – in managing these stresses, but certainly, we will only know the implication in 20 or 30 years’ time when they are older,” Sager said.
Sager said the survey indicated a slight decline in levels of financial stress over the past year, from 78% of respondents last year to 75% this year. However, this was up from 70% in 2022.
“While the data points to a marginal decline, it is still at an elevated level. The trend over the three-year period is upwards.”
The survey was conducted in June. Factors that contributed to consumers feeling slightly less stressed at the time were a significant period without load shedding and interest rates that remained unchanged for over a year.
Between last year and this year concerns about interest rate increases declined by 22%. Those concerned about load shedding declined from 17% to 7% over the same period.
“Increasing interest rates and not knowing if you’re going to wake up to stage 3 or stage 6 load shedding is stressful. Consumers like certainty. Although interest rates are high, consistency is less stressful than dealing with continuous rate hikes,” Sager said.
Of the 75% of people who said they felt financially stressed, 93% said this was negatively affecting their home life, 76% their work life and 74% their health.
Compared to men, women were 10% more stressed about finances, with almost four out of five women saying they suffer from financial stress. They were 20% more stressed about health and 30% more stressed about home life.
Psychologist, Andrea Kellerman, said women were more inclined to admit and express their stress. There was also a societal expectation for women to provide emotional support and nurture their families, rather than only providing financial stability.
She explained that men tend to compartmentalise stress by focusing on one issue at a time, while women were more likely to keep all their stressors open and constantly analyse them. This tendency to juggle multiple stressors simultaneously led to increased feelings of stress amongst women.
“Additionally, consider that today more women are taking on the dual responsibility of being mothers and breadwinners. This adds on another layer of pressure, and the double burden contributes to heightened financial stress,” Kellerman said.
Most people’s main money concerns were short-term. Running out of money before the end of the month and struggling to pay off debt were the dominant worries.
While ‘more month than money’ was a primary concern across all age groups, 70% of those under 55 said they worry about finances.
The 55 or older cohort were least worried about making it through the month and paying off debt, but understandably most anxious about retirement. Middle-aged consumers were most exercised by the dual pressures of not having enough to last the month and repaying debt.
Sager said a concern was that 68% of respondents said they were spending more than 30% of after-tax income on debt repayments.
“Of these 53% used more than 40% of their pay cheques to service debt. Generally, consumers were advised not to spend more than 30% of take-home pay on debt repayment – at most 40%.”
The older people were and the more they earned, the higher their debt levels.
Sixty percent of those aged 45 and upwards had unsustainable levels of debt. The same was true of people taking home R20 000 a month and more. These were the backbone of South Africa’s middle-class population.
“The research clearly reveals that older people with higher incomes are under the greatest debt repayment pressure, yet are most resistant to seeking help. They cite not knowing who to trust as the main reason for inaction. By contrast, 54% of younger consumers show intent in dealing with money stress although are not always sure of the options available to them. The under 35s say they are embarrassed, while the 35 pluses tend to procrastinate,” Sager said.
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