South Africans are expected to spend 24% more on gifts, vacations, entertainment, food and alcohol over this festive season than they would in an ordinary month.
This will mean an injection of R254 million into the economy, but will also lead to many people getting into debt.
Short-term lender Wonga’s second annual poll on expenditure over the festive season, comprising 6 000 employed South Africans, showed that those who were part of the poll each expect to spend an average of R6 585 – 46% of their net income – this holiday.
This is over and above the expenses normally budgeted for.
The poll also shows that more than three quarters of all South Africans will spend more over the festive season.
Food and alcohol will comprise about 37% – an average of R2 430 – of total spending over this period. Gifts will account for 20% – an average of R1 200.
However, Wonga’s poll found that more than half of the 6 000 participants said they did not like the pressure of having to spend more money over the festive season.
Just under half of the participants (45%) plan to use their 13th cheques to finance the extra expenditure, while 42% will use their savings and 25% will use stokvel payouts.
The financial pressure that a significant portion of the country’s population is experiencing means that only one in three of the people polled were planning to travel over the festive period – 5% less than last year.
A third of the participants said that the high cost of travel was the reason they would remain at home.
Substantially fewer South Africans plan to incur debt to cover the extra financial outlay – just 17% said they would take out personal loans, and 11% plan to use their credit cards for the extra expenses.
Jaco van Jaarsveldt, decision analytics head of consulting and marketing services at data analysis company Experian, said the tendency to make less use of credit could probably be linked to the much more stringent credit requirements that lenders are using to protect themselves from defaulters.
Experian’s latest index, which measures defaulting among consumers, shows that outstanding debt in South Africa was more than R1 700 billion at the end of September.
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