DebtBusters: South Africans spend more of their salaries on servicing debt

DebtBusters found that people applying for counselling with a take-home pay of over R20,000 per month are spending 60% percent of their monthly net income servicing debt.

Picture: 123rf.com

CAPE TOWN - With South Africans once again feeling the pressure from a harsher lockdown, many now have their backs against the wall facing high debt levels.

DebtBusters on Tuesday said to make matters worse, many South Africans were unable to save, which would jeopardise their future.

The organisation looks at data from thousands of South Africans who applied for debt counselling in the first quarter of this year.

The company found that people applying for counselling with a take-home pay of over R20,000 per month are spending 60% of their monthly net income servicing debt.

A July marks National Savings Month, DebtBusters said there were various reasons why South Africans found themselves in trouble.

These include salary cuts over the past year, and the prices of essential items increasing - forcing consumers to borrow to make up for the shortfall.

One woman said the pandemic had been a headache for her as her salary was reduced significantly.

Her company told staff that they would either need to close their doors or cut back on hours. So, from working four weeks a month, she now works only two weeks.

β€œIt’s a big financial burden and my salary wasn't even coming close to me being able to pay my bond. Let alone paying for water and rates. I still have to make sure that I have money for the month to get to work,” she said.

And while she is grateful she has a job, her bills such as her bond are falling behind because she just can't keep up.

"At the moment, most of my bills are high, because of this pandemic. if they want to take me to court or lawyers, there's nothing I can do about it because the current situation I'm in is that I work seven days on, seven days off,” she added.

While she has the support of her husband, she said her motivation to keep going was her young son.

With no increases for staff at many companies, and some losing a section of their salaries anyway, there are concerns that people will continue to go insolvent.

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