South Africans will each spend an average of R5 673 over this festive season, over and above their usual monthly expenses according to Research by Wonga, a short-term lender.
Based on Statistics SA’s mid-year population size estimates, this means that working aged South Africans are set to pump R210 billion into the economy.
8 240 South Africans shared their plans for the holidays as part of Wonga’s Summer Spending Survey.
Compared to the research conducted by Wonga spending over the festive period is forecasted to be down 15 percent from 2019.
“Our survey revealed that 56 percent of people think they’ll spend less this festive season than they did in 2019, given the severe financial impact that the pandemic has had. The 15 percent decrease in predicted spend overall is significant. Last year we saw the predicted spending increase by 24 percent from 2018, which means that the trajectory of growth in spending year-on-year has been massively impacted,” said Bryan Smith, Content Manager at Wonga.
Wonga research also showed that 47 percent of South Africans report that they are worse off than they were this time last year, with only 20 percent saying that they were in the same position financially.
South Africans attribute this decrease in predicted spending over the festive period to having less money due to the Covid-19 crisis and national lockdown (65 percent), as well as not wanting to go out or do as much because of the pandemic (51 percent) while others (27 percent) reported that they wanted to save money.
Festive budgets
The research revealed that 75 percent of South Africans spend more than usual over the festive season.
Due to the negative impact of the Covid-19 pandemic, however, 56 percent of South Africans will spend less over the summer holidays than in 2019, although some (28 percent) still plan on spending more.
To cope with the extra expenditure over the December period, people plan to draw from their end-of year-bonuses (42 percent), dip into their savings (38 percent) or rely on stokvels (25 percent).
Some people (22 percent) plan on taking out a short-term loan while (9 percent) of respondents will use credit cards to get them through the festive period.
Festive gifting
Nine in ten South Africans plan on buying gifts this festive season and, while the majority (75 percent) plan on spoiling their family.
Some respondents (19 percent) are planning on buying themselves a gift this Christmas. The firm favourites at the top of 45 percent of people’s Christmas lists are money and vouchers (19 percent).
21 percent of respondents plan to do all their shopping online, this has likely been driven, in part, by a shift to ecommerce driven by the national lockdown.
While most respondents still prefer to shop at traditional brick-and-mortar stores (68 percent) but the remainder of respondents intend to make their own gifts, or to purchase gifts from markets.
Smith said, “This year has been a tough time for many people, and South Africans are more cautious about spending money over the festive season, choosing to spend less and save more”.
“However, people are all holding on and looking forward to a more positive year next year – 54 percent of the respondents in our survey say they are optimistic or excited for 2021,” concluded Smith.
PERSONAL FINANCE