Research conducted by Wonga SA has revealed that South Africans between the ages of 18 and 65 are set to spend an average of R5 706 each over the festive season. Based on Statistics SA’s mid-year population size estimates, that means that working- aged South Africans are set to pump R204 billion into the economy.
As part of Wonga’s Festive Spending Survey, almost 7 000 South Africans spilt the beans on what they plan on doing these holidays, who they plan on doing it with and how much they intend to spend.
“The December period is notoriously expensive, as people go on holiday, buy Christmas gifts, indulge in festive treats and enjoy time out with family and friends. We created this survey to help us understand how South Africans celebrate the festive season, as well as how they cope with the additional expense,” explains Taryn Schmidt, Chief Marketing Officer at Wonga SA.
Unsurprisingly most respondents (76%) claimed to spend more than usual over the December period. Food and drink are likely to cause the biggest financial strain, with South Africans expecting to spend an average of R2 174 on those holiday indulgences. Travel, including standard commutes or holiday trips, came in next at an average cost of R1 633, followed by gifts at R1 232 and entertainment at R667.
In total, respondents expect to spend almost R6 000 each. This is more than a third of the average South African’s ‘take home pay’ according to Bankserv Africa’s latest index, which makes budgeting essential if financial hardship is to be avoided in the new year.
For a majority of the respondents (50%), assistance comes in the form of a much-needed thirteenth cheque or end-of-year bonus. Many also claimed to either contribute to a stokvel (25%) or save throughout the year (37%) to comfortably navigate their December spending and only a small percentage (18%) said they would need to borrow money from a credit provider to fund the extra costs.
“As a nation, South Africans are heavily indebted. However, the results of this survey indicate that many employ healthy financial strategies to ensure they enter the new year on a strong financial footing. It is concerning, however, that many rely on a thirteenth cheque or bonus to tide them over this period. If they unexpectedly don’t receive one, they may find themselves in financial difficulty,” says Schmidt.
Almost 40% of the respondents claim to have holidays planned this festive season with the vast majority (75%) journeying to visit family and friends.
Durban appears to be the destination of choice with 18% of respondents destined for its shores, followed by Cape Town at 11%. The bad news for those hoping to avoid traffic chaos this year is that the vast majority (57%) plan on travelling by car.
For those who won’t be leaving home, 29% claim that it’s too expensive to travel, due to rising expenses such as fuel costs. However, most people (39%) cite work commitments as the main reason they won’t be venturing out this Summer.
Just over 70% of the respondents plan on buying Christmas presents this season. Almost all (98%) plan to buy these for family, followed by friends (25%). Proving that many South Africans aren’t opposed to a little self-love, 20% of respondents plan on getting themselves Christmas gifts. A sweetener for a challenging year!
Despite the rise of internet shopping, traditional brick and mortar shops remain the favoured destination for Christmas shopping this year. 81% of respondents plan on braving the crowds at their local mall as opposed to only 12% who plan to shop online for gifts.
In terms of the gifts that most people are hoping to see under their tree this year, money is at the top of most wish lists (32%) followed by vouchers (27%).
“Financial gifts such as vouchers can alleviate some of the pressure on stretched budgets this December, as well as giving recipients the flexibility to buy something they really need,” explains Schmidt.
Only 19% claimed to observe religious traditions during the festive season which is surprising considering that both Hanukkah and Christmas fall during December. Instead, most people will commemorate the holidays with family and friends, and the favourite way to do that, by far (71%), is the traditional South African braai.
“As a nation we are renowned for our love of the braai and, with the festive season falling at the height of summer, it’s not surprising that most South Africans prefer to celebrate outdoors with friends and family.” concludes Schmidt.
Whatever your plans, Schmidt encourages South Africans to budget wisely during the festive season and only spend what they can afford. Times are tough and we can’t be sure what 2019 has in store. The best gift you can give yourself is a strong financial footing for the new year.