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Survey: Covid-19 flattens personal finances

Budgets stretched to the limit

Families are under immense strain due to pressure on finances during the coronavirus pandemic. Nik Shuliahin/Unsplash

The coronavirus pandemic has “significantly or very significantly” affected the family earnings of about three quarters of ordinary South Africans who took part in a snapshot survey – and the vast majority of them can only afford an emergency payment of less than R5000.

These are just some of the sobering findings in the first edition of a household family finances survey conducted by personal finance website JustMoney. Established more than a decade ago, the company provides busy and digitally-savvy South Africans with easy access to financial information, services and products.

Mannie Cristaudo.

JustMoney’s Business Head Mannie Cristaudo says: “In an effort to understand what our readers have experienced during the coronavirus pandemic, we conducted a survey for April. Nearly 2000 readers took part, answering 12 key questions.”

Read the survey here.

Lockdown financial pressure

While 73% revealed that their family earnings had been “significantly or very significantly” affected, more than 36% of respondents stated that they would nonetheless not consider a payment holiday on their debt. However, the second largest group, at just under 27%, said that they were definitely considering this.

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One of the most harrowing statistics indicated that more than 77% of participants were worried about their financial situation as a result of the coronavirus pandemic. Just under 20% admitted to being somewhat concerned, and fewer than 6% said it did not concern them.

 

Just under 79% of respondents said that they were only able to afford an emergency payment of less than R5000. Fewer than 10% could afford an emergency payment of up to R10000.

Survey participants

Of the 1986 participants, more than 11% of readers work in retail, nearly 9% in government, and just under 8% in construction. However, most (43%) selected “other” and many specified that they worked in manufacturing, communications, the informal sector, or were unemployed.

More than 77% of participants categorised themselves as employees, while the rest said that they were self-employed – such as freelance workers or contractors. Just under half (43%) said they earned under R10000 each month and barely 10% fell within the top bracket of earning more than R40000 each month.

Considering these income brackets, just over 68% of participants said they would not be able to survive for more than a month on their savings. Many would struggle to survive a week.

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Managing money matters

More than half of the participants (53%) said they create a personal budget every month. However, nearly 20% admitted to never having drawn up nor relied on a monthly budget, says Cristaudo.

About 81% of participants were aware of all of the debit orders that came off their accounts, while the remaining participants were unaware of all their monthly debit orders. In addition, more than 64% of participants regularly reviewed their bank statements.

The survey also revealed that the majority (44%) only occasionally access their credit reports. Interestingly, there was almost an equal split between those who accessed their reports on a monthly basis and those who did not access them at all.

It’s encouraging to see how many families are doing their best to plan and stay on top of their finances, despite the unexpected fallout from Covid-19. Sharon McCutcheon/Unsplash

“Despite participants being predominantly employees who earn less than R10000 each month, it is encouraging to note how many are making an effort to stay on top of their finances despite the extremely challenging times,” says Cristaudo.

“More than half set out a monthly budget and over 80% monitor their monthly debit orders. It is also reassuring that less than 30% are considering taking a payment holiday.

Life in the time of corona, means many South Africans, but definitely not all, are accepting offers of ‘payment holidays’ from financial institutions as a means of survival. Picture: Engin Akyurt/Unsplash

“The pandemic is having a harsh impact on many South African households, whose budgets are already stretched to the limit. We will continue to conduct research every quarter to show how ordinary South Africans are coping.

“More than ever, it is essential to get to grips with your current financial situation, understand where your money goes, draw up a budget and do your best to avoid debt.”

JustMoney website here

**The company offered this sound advice on family finances that has stood the test of time:

Set aside money to cope with unexpected expenses such as a new set of car tyres or a TV; save enough to cover your income for two to three months; then start putting money into retirement annuities and other investment products.

**JustMoney provides busy and digitally savvy South Africans with easy access to financial products, services and information. This is done by partnering with trusted financial brands and offering articles, money management tools and a full range of financial products and services.

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