As living expenses such as food and fuel rise, so has the proportion of income we spend on these consumables, putting the squeeze on our ability to save and service debt, a survey reveals.

Savings as a percentage of household spending have been declining since 2013, when they represented on average 20% of household spend compared with 14% this past year.

The latest Old Mutual Savings and Investment Monitor results, released this week, reveal that households are spending 67% of their household income on living expenses compared with 62% the previous year.

Fourteen percent is being saved, 13% is spent on servicing debt and 6% goes towards insurance and medical schemes.

Savings (pension funds, education policies, and so on), as well as insurance and medical scheme costs, have been cut back by a percentage point each, while debt servicing has to 13% of income from 16% last year.

Furthermore, the outlook for the economy, and therefore the prospect for saving, is gloomy, according to Rian le Roux, Old Mutual Investment Group's economic strategist.

The economic contraction in the first quarter of this year was a huge shock, and there is no evidence of a material improvement in the second quarter, he says.

"Saving depends on the ability to save, which, in turn, crucially depends on more jobs being created," he says.

The annual survey of employed people in metropolitan areas identifies some bad habits South Africans could fix to improve their financial lot:

• High debt-servicing costs stemming from high debt levels. Even high earners (those earning R80000 a month or more), who spend a smaller proportion of their income (42%) on living expenses relative to other income groups, spend 17% of their income servicing their debts, substantially more than the 13% spent by lower-income households. The Monitor shows that 27% of high-income households have personal loans from a financial institution, compared with only 14% of South Africans with lower incomes;

• There has been a significant increase in South Africans paying only the minimum instalment on their credit card debt, one of the most expensive forms of debt you can have. The Monitor found that 38% of those earning R40000-plus, for example, paid only the minimum each month;

• Some 57% of South African parents are not saving for their children's education. In 2010, more parents were saving for education - only 37% of parents were not saving for education then;

• South Africans have higher expectations than before that they will have to support their family or parents in the future (57% expected to do so last year versus 50% in 2012);

• The Old Mutual Sandwich Generation Indicator shows that 27% of South Africans support their children as well as parents or other older dependants;

• One out of every two adult children between 18 and 30 opt to live at home with their parents;

• There has been a significant improvement in the percentage of households who make it through to month-end without having to borrow from friends or dip into savings, but 41% of households (and 73% of households earning less than R6000 a month) still run out of funds to cover their expenses at least once a year;

• Over the past two years, fewer South Africans made late payments on their bills or missed payments when their income and expenses were out of sync, but one in four South Africans earning R20000-plus resorted to taking out personal loans to make ends meet this past year and fewer people are borrowing from cash-strapped family and friends; and

• To cut back on expenses, South Africans are delaying plans such as home renovations, cutting back on the purchase of airtime, electricity, groceries, DStv subscriptions, domestic workers, armed response services and holidays, and are shopping at cheaper supermarkets and buying cheaper brands of goods, Old Mutual's research manager Lynette Nicholson says.

South Africans' sentiment about their finances has remained fairly stable. Overall, they rate their confidence in making financial decisions at 6.4 out of 10 and their satisfaction with their current financial situation at 5.9 out of 10, according to the Savings and Investment Monitor.

Nicholson says she hopes that some of the sobering results from the 2018 survey will encourage South Africans to commit to responsible financial habits.