FIFI PETERS: Let’s have a look at what South Africans are doing with their cash and the way they’re relating with their cash on this present financial atmosphere. According to the newest Old Mutual Savings and Investment Monitor [OMSIM], virtually one in 9 South Africans say that the Covid-19 pandemic has modified how they handle their cash, and it’s modified it for the higher. So the index seems to be, as I mentioned, on the relationship that households have with their funds. It’s based mostly on a survey of round 1 500 households with [monthly] incomes of R8 000 and above.
To inform us precisely what South Africans are doing otherwise this time round because it pertains to financial administration at residence, I’m joined by John Manyike, the top of financial training at Old Mutual. John, good to converse with you once more. You and I have been collectively earlier on the launch of the particular 2022 OMSIM report, however for the aim of our listeners who weren’t there, your survey this time round means that South Africans have a extra optimistic relationship with their funds. So, in sensible phrases, break that down for us. What are they doing otherwise this time round?
JOHN MANYIKE: Yes, fairly an attention-grabbing report and insights from the Old Mutual Savings and Investment Monitor. We are definitely seeing that this particular person optimism is on the rise and people are usually optimistic about their financial place outlook – and that’s a optimistic. We definitely consider that it has been paying dividends.
We are seeing people’s private earnings enhancing. About 34% of people are saying – nicely, as compared to the identical time final yr; about 53% final yr mentioned, look, we’re incomes lower than we have been earlier than Covid – this time round solely 34%. That’s an enormous enchancment and really, very encouraging.
But we’re additionally seeing people who’re increased risk-inclined, people who’re extra ready to spend money on cryptocurrency. We’re seeing about 44% counting on playing as a supply of earnings to make ends meet.
But additionally there’s some optimistic by way of people’s confidence in their financial decision-making.
We are noting a really sturdy correlation between people’s confidence, their decrease financial stress, and the propensity for them to save.
In different phrases, the extra assured people are in their financial decision-making, the extra possible they’re to save in contrast to those that are usually not assured – which once more highlights the necessity for financial training to encourage people and have extra people extra assured in how they cope with their cash.
FIFI PETERS: But simply break down the nuances in that confidence and in the truth that the behaviours of much more South Africans have turned much more optimistic because it pertains to their cash. Are there variations by way of earnings teams, as in: are sure earnings teams much more optimistic, and sure earnings teams so much higher in managing their funds than different earnings teams? Because our nation could be very various in color, gender and pay variations. I’m questioning if these variations are mirrored within the report.
JOHN MANYIKE: I didn’t notably have a look at that element, however I believe usually talking the upper an individual [earns] the extra possible they’re to qualify for credit score, and the extra possible they’re additionally to be people who’re uncovered to being over-indebted. So I believe it’s one thing that one might have to have a look at.
But I might suspect that people who’re incomes extra are extra possible to be in debt and having financial difficulties total, when these numbers are primarily for people who’re incomes R8 000-plus in the principle – and these are the tendencies that we’re selecting up from these specific people.
FIFI PETERS: So given what’s taking place proper now, in the present day, as you and I regarded on the inflation numbers that got here out, and we’re awaiting the Reserve Bank to do its factor on rates of interest tomorrow, how are you anticipating the present cost-of-living pressures to affect how customers relate with their cash this time subsequent yr?
JOHN MANYIKE: We’re already seeing customers adopting extra accountable strategies of saving, and creating methods. For instance, about 66% are switching extra to loyalty programmes – and that’s encouraging. We’re seeing people, about 33%, switching to cheaper grocery store manufacturers; about 33% once more who change to cheaper TV, or streaming choices. Of course, when it comes to cellphone and knowledge choices [they’re] in search of cheaper ones, transferring kids to inexpensive colleges. So there are definitely other ways.
These are clear indications that South Africans are discovering methods to undertake new strategies to try to reduce on bills.
FIFI PETERS: It appears like you might be additionally saying that a whole lot of South Africans have retired from attempting to sustain with the Joneses and the Khumalos. They are comfortable to downgrade the place obligatory to get by and make ends meet.
JOHN MANYIKE: Absolutely. That is a agency pattern that we’re seeing, and I believe it’s one thing that almost all people want to take into account adopting.
FIFI PETERS: All proper, John, good to know. We’ll go away it there. Thanks a lot in your time. John Manyike is the top of financial training at Old Mutual.