More month at the end your money? Survey reveals nearly half of SA salary earners are broke before payday
Standard Bank analysed data from over 402,000 of its clients to highlight the growing challenge of balancing income with lifestyle.
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Stephen Grootes speaks to Kabelo Makeke, head of personal & private banking at Standard Bank South Africa.
Listen to the link in the audio player below.
Nearly half of salary earners are left with less than R1,000 or have negative balances by payday.
That's according to the findings of a survey conducted by Standard Bank.
The data of more than 402,000 individuals were analysed, revealing the discouraging, but expected outcome that most South Africans are struggling financially.
The day before payday, 21% had R1,000 or less, while 28% had negative balances or were using overdrafts. Only half had more than R1,000 in their accounts.
Emerging middle-income earners had the highest percentage of customers with less than R1,000 or in the red.
Private banking customers aren’t exempt either, with one in ten customers having a negative balance before payday.
Speaking to Stephen Grootes on The Money Show, Kabelo Makeke, head of personal & private banking at Standard Bank South Africa says while the insights are discouraging, there are effective strategies to help manage finances better.
Makeke says the findings reveals the importance of raising awareness about lifestyle inflation, a phenomenon where rising incomes lead to higher spending that often outpaces earnings.
"It's the simple basics we just don't follow, a simple budgeting process of what you spend on a monthly basis and sticking to it."
- Kabelo Makeke, head of personal & private banking - Standard Bank South Africa
"Every time somebody gets their salary increase for example, they tend to spend more. They never think about 'where should I put a little bit more of savings for emergencies'."
- Kabelo Makeke, head of personal & private banking - Standard Bank South Africa
"The main thing is about freedom. Freedom is about being able to live within your means. Just being able to say 'I do have some money left over at the end of the month, I can carry it through to the next month'. That's freedom."
- Kabelo Makeke, head of personal & private banking - Standard Bank South Africa
Scroll to the top of the article to listen to the full interview.