In 2023, South African households faced financial challenges, as revealed by the TransUnion Consumer Pulse Survey for Q4. The survey highlighted ten significant factors influencing household income dynamics:
Job Losses: The primary factor affecting income changes was job losses, impacting a notable 23% of households.
New Business Commencement: Income growth was driven by new business ventures, contributing to a 16% increase in some households.
Higher Salaries: About 14% of households experienced income growth due to higher salaries.
Lower Wages: Conversely, 17% of households reported a decline in income attributed to lower wages.
Varied Income Trends: While 34% of households witnessed an increase in income, 44% reported no change, and 22% experienced a reduction.
Optimism Amid Challenges: Despite economic challenges, 74% of households anticipated income growth in the next 12 months, showcasing resilience.
Generational Optimism: Gen Z and Millennials displayed optimism at 80% and 77%, respectively, regarding their finances in the coming year.
Debt Management Concerns: While 59% expected to meet current bills and loan obligations, 34% of Gen Z and 42% of Millennials expressed uncertainty in meeting these commitments.
Budget Adjustments: Responding to changes, 29% paid down debts faster, 25% increased emergency funds, and 18% saved more for retirement.
Spending Adjustments: For the next three months, 47% planned to cut non-essential spending, with Gen X and Baby Boomers leading in significant discretionary spending cuts at 51% and 56%, respectively.
In debt management, 34% planned to use savings, and 31% aimed to make partial payments to meet obligations. Looking ahead, expectations varied across generations, with 41% of Baby Boomers and Gen X anticipating increased bills and loans, while younger Gen Z consumers predicted a rise in retail expenditure.
Interestingly, Gen Z and Millennials planned to boost contributions to retirement funds and investments, reflecting a generational shift toward securing long-term financial stability amid economic uncertainties.
