Subscriptions gone, eating out cut, but South Africans still can’t cope

Some consumers are still building buffers and paying down debt, while others are drawing on savings or credit to get through the month.

South Africans are cancelling subscriptions, eating out less and watching every rand. Almost four in 10 still expect to miss a bill or loan repayment.

The problem does not appear to be that South Africans have failed to get the message about saving. Consumer research suggests many are cutting discretionary spending, paying down debt and trying to build emergency funds.

But there is often little left between managing the month and being tipped into financial difficulty by an unexpected expense. “Consumers are still managing, but the margin for error is shrinking,” says Ayesha Hatea, director of research and consulting at TransUnion South Africa.

“Even modest increases in essential costs are forcing difficult trade-offs , which is reflected in lower confidence and more cautious credit behaviour.”

TransUnion's latest Consumer Pulse Study found 39% of South Africans expected to miss at least one bill or loan repayment. Inflation ranked among the top three household financial concerns for 79% of respondents and only 37% believed their income was keeping pace with rising prices.

In response, more than half of consumers had reduced discretionary spending such as dining out, travel and entertainment over the previous three months. Another 28% cancelled subscriptions or memberships and a quarter cut or cancelled digital services.

Byron Geddes, a financial adviser at ASI Wealth, calls it the “financial triage effect”.

“Think of it like an emergency room, where doctors focus on the most urgent patients first. Right now, families are making sure the essentials, like housing, groceries, transport, insurance, and debt repayments, are covered before anything else. Things that aren't absolutely necessary are being put on hold for now.”

As a result of people stuck in survival mode, bigger-picture goals like saving for retirement, investing, or building an emergency fund often get pushed aside, Geddes notes. “Over time, this can lead families to fall behind financially, making it much harder to bounce back when a crisis or unexpected expense arises.”

TransUnion’s figures show that 14% of those it had surveyed had cut their retirement savings, 14% were using more available credit and 13% had dipped into retirement savings.

“Some consumers are still building buffers and paying down debt, while others are drawing on savings or credit to get through the month,” Hatea notes.

Despite this, consumers are trying to tackle debt, with almost a third of consumers surveyed by TransUnion paying down debt faster, 27% had increased contributions to emergency savings or stokvels and 20% were saving more for retirement.

“That is why the broader picture is one of sustained financial adjustment rather than simple improvement,” says Hatea.