Are South Africans Living in the Red ?

Six out of ten South Africans (64%) believe that many people are living beyond their means and spending more money than they are earning.

These findings are from Ipsos Markinor’s latest Socio-Political Trends survey, conducted in November 2007. This survey is part of the Pulse of the People public opinion series and has been conducted bi-annually since 1990, each time amongst a nationally representative sample of 3500 adult South Africans, as such allowing for comparability across time.

When examining the group of South Africans who are of the opinion that a lot of people are living in debt, interesting divisions emerge – educated adults believe people are spending more than they are earning: 83% with a tertiary education and 73% with matric, compared to only 59% of those with some high school education and only just over half (51%) of South Africans with no education are of the same opinion.

With regard to the different races 89% of Indians, 81% of Coloureds and 76% of whites agree that South Africans are living in debt compared to 59% of blacks.

As household income increases so does the belief that South Africans are living beyond their means, as illustrated in the table below:

Four out of ten South Africans (39%) indicated that they tend to spend money they do not really have. Closer inspection of the different races in this instance shows that Blacks (42%), Coloureds (39%) and Indians (39%) are more inclined to live in credit as compared to Whites (24%).

According to the National Treasury Director-General, Lesetja Kganyago, hiking interest rates are required to correct imbalances in the South African economy as people continue to live beyond their means¹. However, in response to Ipsos Markinor’s survey question “The increase in interest rates is a good thing, because it curbs spending” only 2 out of 10 South Africans (24%) support the notion that higher interest rates will tighten the belt on consumer spending.

Differences in response to this statement by the different races was also seen with 40% of white South Africans agreeing that higher interest rates will curb spending, compared to 29% of Coloureds, 28% of Indians and 20% of blacks.