Cash-strapped South Africans are choosing to spend their hard-earned salaries on food, transport and entertainment, according to a report.
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Cash-strapped South Africans are choosing to spend their hard-earned salaries on food, transport and entertainment, according to a report.
Standard Bank’s data — tracks the spending patterns of its retail customers — shows a decline in household spending on charity, donations, healthcare, insurance, family and home-related expenses such as home improvements and furnishings.
Standard Bank's Shené Mothilal explained that while the spending patterns of South Africans have remained relatively stable over the past three years, certain shifts in spending habits were becoming more evident, reflecting the ongoing economic pressures that many households were facing.
Mothilal, Solution Owner of Digital Money Manager at Standard Bank, said interestingly, transport costs have remained stable, despite fuel price hikes in the past three years, possibly due to ongoing hybrid work arrangements or adjustments in commuting habits to save on transport-related costs.
The report showed that people were paying more on interest payments.
"This comes as no surprise, given that South Africa’s prime interest rate has been rising since late 2021, remaining high until the first 25 basis point cut in September, with another reduction in November," Mothilal said.
She said that another notable shift was the rise in digital payments, as cash withdrawals continued to decline.
"Consumers are increasingly turning to digital payment methods, in particular cellphone payments like instant money, for convenience. While these come with added fees, the introduction of Payshap has broadly aimed to reduce these costs, attracting more users to instant payment options," she said.
Regarding seasonal spending trends, Mothilal said South Africans tend to spend more on fitness and self-care as part of their New Year’s resolutions and holiday-related self-care while they tend to spend more on charity and donation drives around April and during Eastern when charitable giving is encouraged.
IOL
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