The 2020 Momentum Science of Success Festival, held in Johannesburg and broadcast via a Facebook Live event on 25 November 2020, brought a fresh perspective to household financial wellness success in an accessible and unconventional way.
Unisa’s partnership with Momentum - through its Bureau of Market Research (BMR) - to obtain better understanding of and insights into South African household finances has been running for nine years. This year’s Momentum/Unisa Household Financial Wellness Insights report served as the backbone of the festival as it seeks to provide South Africans with an in-depth look at the state of their finances in their homes. The report provides information specially designed to inform and empower SA households to achieve financial success and recover from the possible impacts of life before, during Covid-19 and beyond.
The research highlights that SA’s middle-class households were hit the hardest as a result of the Covid-19 pandemic and resultant lockdown, as both their physical and asset capital were severely impacted by factors beyond their control. The good news is, despite the lockdown and other challenges experienced due to Covid-19, some have already recovered - for several reasons - but mostly because they followed a specific recipe necessary to taste financial success.
Even before the onset of the Covid-19 pandemic in the country and the implementation of a lockdown period in March, the SA economy was not a positive environment within which companies and households could thrive. With decelerated economic growth and an increase in job losses, more and more South Africans have now become excluded from participating in economic activity.
The report shows that those who experienced financial pressure due to a salary reduction dealt with the challenge by reorganising their spending patterns. This involved changing their store of preference, updating their budgets and cutting back on luxuries (financial management), and managing their debts. The adjustments that were placed at the bottom of the list included reviewing medical aid, business closure or changing living arrangements.
To be better prepared for the journey towards financial success, it is important for households to gain a good understanding of the factors that are within their control and those over which they don’t have any control. It is vital for households to know that there are ways to self-guard them against some of these factors. In order to limit the impact of factors beyond our control households should minimise financial dependence on others (including government), spending on luxuries, increase savings for emergencies and for the long-term, such as retirement, insure against the uncertain and access credible financial advice.
The report reveals the following seven habits of households that can weather a financial storm:
The research also provided a snapshot of the financial reality of women in South Africa, revealing that women were more at risk of losing their jobs during lockdown or working lower paid or less hours.
The research is the result of the collaborative effort by the BMR, the Unisa College of Accounting Sciences, and Momentum.
Read the detailed report here.
* By Jacolize Meiring, Researcher, Personal Finance Research Unit, Bureau of Market Research
Publish date: 2020-12-02 00:00:00.0