Are South Africans drowning in debt?

According to News24, 86% of South Africans borrowed money between 2013 and 2014. There are more than 23 million of credit active consumers in the country, with only just over a half of them said to be in good standing. More than 10 million people have impaired credit records and find it difficult to meet their monthly debt repayments. Sadly, more than 50% of those struggle to pay their home loans.

Statistics show that an average consumer in our country spends as much as 49% of their take-home pay on debt repayments, and 34% on everyday living expenses like food, domestic bills, transport. Experts in the field of personal finance claim that in order to achieve financial stability these two figures should be more or less equal, and also emphasize that 25% should be spent on risk protection/insurance. It is worrying that South Africans spend way below the recommended 25% with an average of 17% of their after-tax pay going towards risk protection, and even more so that the number of citizens who have no insurance is now at 34%.

It comes as no surprise then that debt counselling and restructuring are becoming increasingly popular in the country. Sweeping the issue under the carpet and continuing to spend half of your income or on debt repayments, without protecting yourself and your family against the consequences of unexpected life events like an illness, accident, or unemployment is certainly not a good attitude to have. Don’t be afraid to look for help on matters as important as your financial wellbeing, and get professional advice for instance from a Debt Management company.

If you’re struggling with paying off your debt, and you feel like you could do with some help to get it under control, contact us today by filling in a quick online form.