South Africans cut expenses, develop side hustles to survive tough times
Switching to cheaper supermarket brands, cutting gym memberships and opting for cheaper data and cellphones is how some people are trying to stretch their money in tough economic times, mostly due to the Covid-19 pandemic in SA.
The annual Old Mutual Savings and Investment Monitor research report, released on Wednesday, revealed that about 65% of respondents were prioritising how they managed their money. It found 39% of respondents had switched to cheaper supermarket brands, while 25% shifted to cheaper cellphone and data options.
The report offers insights on the habits and behaviours of working South African metropolitan households.
“There is no doubt that consumers are having to take a much closer look at the way they manage their money and many are having to adapt their lifestyles to survive,” said Lynette Nicholson, head of research at Old Mutual.
About 62% of households were cutting expenses where they could, 50% (up 10% from 2020) were prioritising paying off debts and 37% were ensuring they had emergency funds — up from 33% in 2020. About 31% had replaced gym subscriptions with exercising at home, 18% moved in with family and 16% had family members move in with them to reduce living expenses.
The report noted that 23% of the working metropolitan population said they were or had checked they had enough insurance protection in place.
Nicholson said this year’s report was surprisingly encouraging, considering the challenging backdrop.
“The Covid-19 pandemic seems to have jolted many of us into facing up to financial realities that we may have been in denial about in the past. For example, 87% of South Africa’s working metropolitan householders claim that the pandemic has changed the way they think about and manage their finances.”
The research also indicated that job and income security remained the top financial priority for 65% of working city dwellers surveyed.
A leading trend that emerged was growth in the number of working metropolitan individuals who had more than one job or source of income: 47% (10% more than in 2017) of the respondents were multi-earners, combining permanent employment with another form of formal employment (contract work) or a “side hustle” (informal employment).
“Having a supplementary income is no longer deemed a luxury and it is highly likely that we will continue to see an increase in the number of people who pursue this route as a way to keep afloat in these tough economic times,” said Nicholson.
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