As South Africans we are faced with complicated financial times. Borrowers may find they have extra cash on hand as interest rates fall, but fuel, food and electricity prices are increasing, eating into our pockets. And South Africa — as with most countries around the world — is facing a recession. Suddenly, many jobs are on the line.
As a result many of us are feeling negative about our financial future. However, recent research shows that people are resilient and, when faced with difficult times, they often use this opportunity to sort out their finances.
The Solution Workshop, a qualitative specialist research supplier, ran focus groups to find out exactly how consumers are responding to the tough economic times. The researchers were surprised by how positive the results were.
People have become increasingly industrious and have moved out of their comfort zones. Rather than sitting back and giving up, the recession has made people more focused about their finances and they are finding new ways to manage things.
Family values are making a comeback. Because people are going out less, they are spending more time doing things together, such as watching DVDs and preparing home-made meals.
People interviewed said that communication at home has improved.
Parents are budgeting and communicating as a couple to make financial decisions together. They are also teaching their children to understand the word “no” and that you have to have money before you can spend it.
Researchers found that, as in most difficult times, people are turning increasingly to spiritualism and a reliance on the power of belief and that if they believe and trust in a higher power their needs will be met.
People are sharing more, adults are trading skills and sharing reading material, while kids are wearing hand-me-downs.
Many are also cutting back substantially to come out on their budgets, rather than taking out further loans. And, even in these tough times, people are more focused on trying to get rid of debt.
Researchers found that although many people are not aware of their options to reduce debt, such as debt consolidation, they are open to information and want to educate themselves on how to stay in control of their expenses.
How people are saving
Stricter budget control — in good times people tend to spend without thinking. But when times are tough, every cent starts to count. People are budgeting and using spreadsheets.
Financial frugality — members of the public are giving more thought to what they purchase.
Stretching meals — this includes cutting back on more expensive foods, such as eating meat only once or twice a week.
Growing vegetables — many South Africans have started growing their own vegetables.
Using natural medicinal remedies — there is a shift towards herbs rather than more expensive pharmaceutical products.
Using multipurpose cleaners — rather than buying a separate cleaner for bathrooms, kitchens and windows, there are many multipurpose cleaners.
Bringing outside entertainment indoors — people are cutting back on eating out and inviting friends to their home for a “bring and braai”.