According to recent data by First National Bank (FNB), middle-income earners spend up to 80% of their monthly salary within five days of payday. The bank defines middle-income earners as those who earn R180,000 and R500,000 a year.
This means they survive on 20% of their monthly salary for more than 20 days in a month.
Raj Makanjee, CEO of FNB Retail reveals that they looked only at customers within that segment who were in good standing from a credit perspective and earning their income through a salary.
He says this is one of the indications that the average consumer is stretched financially.
“The trend also points to a continued culture of consumption, leaving consumers with little to start saving and investing for financial independence.”
Recent data shows that SA consumers rely on credit cards and personal loans to make it through the month, as food and petrol prices shoot through the roof, while salaries remain unchanged.
Factoring in inflation, South Africans now earn around a third less than they did in 2016.
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