With the median salary in South Africa at an estimated R15 000 per month, consumers are having a hard time balancing their expenses and income whilst still paying off large amounts of debt at the same time. However to many R15 000 sounds like a huge amount as many South Africans earn much less than that on a monthly basis.
According to Stats SA average annual household consumption expenditure currently sits at R95 000, which is a massive amount for the average South African to process as it works out to almost R8000 per month. With more than 50% of an average monthly salary of R15000 going toward household expenses, it is easy to see why consumers are falling deeper and deeper into debt.
The biggest expense for consumers is housing costs such as utilities, water and electricity, with transport coming in at a close second. This means that before consumers can even begin to spend any money on themselves, they have to cover costs that give them no corporeal results.
With inflation on the constant rise, the price of living in South Africa is climbing to a place where consumers are finding it harder and harder to make their incomes work for them. Living standards are being forced to decline as consumers are forced to cut corners.
It is no wonder that debt counselling is flourishing, since consumers are increasingly finding themselves in a position where it is nearly impossible to pay their debts, and keep up with the cost of living. However consumers who have undergone debt counselling, and have emerged debt free are finding it easier to make their income cover their monthly expenses. With the help of debt counselling, consumers can turn an average income into an exceptional return.
Article written by: Andrea van Tonder 06-2013