There has been a year-on-year increase in the number of South Africans running out of money before month-end, and an increase in the number of those feeling “frustrated”, research released this week reveals. 

The majority of South Africans — a whopping 76% — run out of money before the end of the month, compared with 73% last year, research commissioned by TymeBank shows. And 57% are out of money by the 15th of the month.

Entitled “More Month Than Money”, the report shows that this is a reality for South Africans across the income spectrum, with 44% of respondents who earn more than R50,000 a month finding themselves out of money before month-end.

This research correlates with the findings of the latest Old Mutual Savings & Investment Monitor, which was also released this week, showing that money is a major source of stress in households across income brackets.

In 2019, 50% of all respondents in the Old Mutual survey of 1,000 working metropolitan households in SA  said money is a major source of stress in their homes, compared with 40% of respondents in 2018.

Arthur Goldstuck, the founder of World Wide Worx which conducted the TymeBank research in collaboration with Ratepop, says it’s significant that there has also been a drop in the percentage of South Africans who know how much money is in their bank account at any given time.

“Last year, 75% of respondents knew. This year, the figure dropped to 71%. It’s almost as if people are scared to look at what’s in their accounts, and because the economy is getting tighter and the money flows out faster, they don’t keep track of it as well. The reality is that times have got harder,” Goldstuck says.

He adds that in 2018, 48% of respondents said that running out of money before month-end left them feeling frustrated. This year 51% said they feel frustrated when this happens, and 35% said they feel helpless. 

Over 60% of households [in SA] are fatherless, which means financial responsibilities fall on women. Add to this that women earn 27% less than men, mothers are carrying a very heavy load
Gerald Mwandiambira, acting CEO of the SA Savings Institute

Once we’ve run out of money, the research shows that 43% of us borrow to survive — this is a significant increase on last year’s 39%. Fifty-nine percent take a loan from family members or friends. This makes sense, since such a loan probably does not attract interest. Unfortunately, 20% rely on our credit cards, while 9% live on an overdraft facility.

The incidence of borrowing from family and friends has increased significantly, year-on-year, Old Mutual’s research shows. Last year, 10% of respondents had a loan from a family member or friend; this year 17% did. And 41% of all respondents who take personal loans from people close to them pay back only when they can, or on an irregular basis.

The report also indicates that women have more debt and are more inclined to be broke before the end of the month at 59%, compared to 56% of men. Mavis Ureke, an international behavioural science and performance specialist, attributes this to the conditioning of women to take care of others.

Gerald Mwandiambira, acting CEO of the SA Savings Institute, agrees: “Over 60% of households [in SA] are fatherless, which means financial responsibilities fall on women. Add to this that women earn 27% less than men, mothers are carrying a very heavy load, and the money they earn has to cover many expenses.”

The percentage of respondents in Old Mutual’s survey describing themselves as single mothers has increased since last year, from 46% to 54%. Only 20% of these mothers receive support from the fathers of their children.

Begin with a budget

If you want to get a better handle on your finances, you need to budget effectively. Only 37% of respondents in the TymeBank survey stick to a budget, the majority being women between 25 and 45, and those who earn less than R10,000 a month. An almost equal number (36%) have a loose mental budget, while 19% admit to drawing up a budget and ignoring it.

Mwandiambira advises putting away smaller amounts more regularly. “Typically, when you ask someone how much they want to save, they’ll say, for instance, R3,000. Few say they will start with R50 and incrementally increase that amount … People battle to get their heads around the first step.”

Among the tips offered by TymeBank to customers is to cut back on big expenses where you can. Given that most of us spend most of our money on accommodation, groceries and transport, look for ways of cutting back in one or more of these areas.

After that, divert any savings towards eliminating debt, then to a clearly defined savings goal. Also consider a “side hustle” — a job on the side, where you can make a little extra to make ends meet and avoid credit. After all, there are only two ways of getting out of financial trouble: spend less and/or earn more.