South Africans will not be able to withstand a financial setback, as most people are living payday to payday, according to the Sanlam Financial Confidence Index 2024.
Only two in five people say that they can endure a financial setback or achieve financial freedom. Only half of the respondents feel like they are in control of their finances.
According to the index, people can start feeling in control of their finances by going back to basics and doing basics well, including:
- setting financial goals
- budgeting
- tracking spend
- delaying gratification and limiting impulse spending
- living below your means
- having an emergency fund
- limiting debt
- learning about finances
- seeking professional guidance.
While most South Africans are living payday to payday, financial confidence in the country is stable with an index score of 47 out of 100.
The scores financial index scores for 2023 and 2024 stayed the same at 47.
Mariska Oosthuizen, Chief Marketing Officer at Sanlam said that their research partner Africa Response surveyed 1,610 individuals to index three key components of financial confidence:
- Financial Self-determination (FSD) which refers to a person’s proactiveness and commitment to achieving financial goals
- Financial Resilience (FR) which assesses a person’s capacity to bounce back from financial curveballs and adapt to changing circumstances while keeping a sense of stability
- Financial Wellbeing (FW) looks at a person’s overall state of financial health and satisfaction, assessing whether they have the resources and knowledge to meet their present and future needs.
Financial resilience index
In 2024, Gen-Z (60) and Millennials (54) had the highest financial resilience.
People who have full-time employment had higher financial resilience (58), along with people who earn more than R20,000 a month (63).
Many consumers are upskilling to increase income, showing a strong entrepreneurial and resilient mindset.
Gen-Z consumers still benefit from familial support, while Millennials are stronger in financial management.
The financial resilience index score for 2024 was 50, slightly higher than the score of 49 for 2023.
Financial self-determination index
In 2024, Gen-Z (66) and Millennials (63) consumers had the highest financial self-determination. This reflects a stronger alignment between their financial needs and aspirations.
People who earn less than R8,000 a month had significantly reduced financial self-determination (48) compared to people who earn R20,000 (69).
In 2024 the financial self-determination index score was 56, lower than the score of 59 for 2023.
Financial well-being index
2024 showed that Baby Boomer consumers have lower financial self-determination and financial resilience indexes due to undefined goals and systems to track their goal, as well as a lack of insurance.
However, they have higher financial well-being (33), reflecting higher security and confidence in their financial circumstances.
People who earn less than R8,000 a month have lower financial well-being (24), compared to people who are earning more than R40,000pm (48), due to anxiety over their future earning potential and investments.
The score on the financial well-being index for 2024 is 29, which is higher than the score of 27 for 2023.
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