SA splurges during World Cup

2010-06-22 17:33

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Johannesburg – Blinded by World Cup enthusiasm, many South Africans are spending money on non-essentials during the soccer tournament, a financial advisor said on Tuesday.

"Gripped by enthusiasm and zeal, too many ordinary South Africans are making financial sacrifices to buy all kinds of non-essentials which they are going to rue over the long term," director of Octagon and debt counsellor Paul Slot said.

Only a minority would have made a conscious effort to save to afford items such as tickets, clothing and memorabilia.

"By far the majority will be indulging in this once-in-a-lifetime event, and the consequences for normal instalment and debt repayments, even home loan repayments, could be dire."

Social spending, Slot said, was buying items not usually included in the monthly budget.

Social spending

"Countless corporates are investing in the event, providing tickets and all the accessories for employees and these employees will allocate much smaller sums to their own social spending as a result.

"But those who don't benefit from corporate spending will be increasing their outlay on social spending."

Repercussions could be neglected monthly repayments, a heavy draw on credit and an escalation of financial stress. This would impact negatively on consumers' productivity, relationships and even health.

Reckless, or simply unwise, spending was already commonplace among South Africans.

"Over eight million consumers already have impaired debt repayment records and most are not in a position to repay the debt comfortably."

The average consumer already used 47% of after-tax income to repay debt which, paradoxically, drove consumers to get short-term credit – the most expensive form of lending available.
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