With 10 million South Africans drowning in debt, Personal Finance rounded up some financial experts for advice that goes beyond skipping lattes and is more offbeat.
According to FinMark Trust, an estimated 10 million South Africans are over-indebted, with 37% of formal credit borrowers facing repayment issues. This figure rises to about 12 million when including those borrowing just from informal sources.
Gary Kayle, co-founder and CEO of the independent financial education group Worth, says these statistics are not abstract. They are lived realities for thousands of families.
“Behind every percentage point of over-indebtedness is a parent borrowing to feed a child, a graduate saddled with debt before they even find a job, or a person unsure where to start because someone else has always handled the finances,” he says.
But where do you start when the problem feels overwhelming? Financial experts say the answer isn’t in deprivation – it’s in working smarter.
Hayley Parry, co-founder and head of education at Worth, recommends a financial spring-clean. Begin by clearing out old receipts, reconciling what’s needed, and digitising unnecessary loyalty cards while keeping some small cash handy for tips or parking.
Then move online, says Parry. Reviewing the past three months of bank statements can spotlight unused subscriptions that can be cancelled.
Rory Brachner, founder of Doshguide, also advocates that people sit down with their bank statements. “Most people budget only for monthly expenses like rent, groceries, and transport, forgetting about annual costs such as holidays, school fees, or insurance renewals,” says Brachner.
To get a true picture of your spending, total those yearly expenses, divide by 12, and add that amount to your monthly budget, Brachner says, noting that you can include a line for guilt-free spending as “financial discipline doesn’t mean cutting out joy.”
On a similar note, Joanne Baynham, wealth manager at Absolute Wealth, says the focus should be on growing your income, not cutting joy from your life. “This idea that skipping coffee or avocado toast will fix your finances is nonsense,” she says.
It is also possible to spoil yourself, such as a dinner out, by leveraging rewards programmes.
Robyn Edwards, senior marketing and brand manager at Finchoice, notes that many people overlook how much they can save through loyalty programmes. By understanding the terms, knowing when and where to shop, and choosing the right partners, you can turn everyday spending into real savings, says Edwards.
“The benefit of that saving and leveraging loyalty programmes really offers you an expense cutback that I think a lot of people underestimate,” she says.
When it comes to the bigger bills, Baynham adds that many of her clients overspend on medical aid. They could rather choose a lower-priced plan, skip the savings option, and take out gap cover instead because it’s the major, unexpected events like accidents or serious illness that matter.
Another tip Brachner offers is that, when you are on a medical aid, to should submit every medical bill to your scheme, even if it’s not reimbursed, so you can claim tax credits.
“They’ll record all expenses on your annual tax certificate, giving you one complete document for your return and ensuring you don’t miss any deductions,” he says. “It’s a simple way to make sure you capture every possible deduction without any admin headaches.”
In addition, says Baynham, many people forget to reassess their life insurance as they age. It’s vital when you’re young and have dependents, but as assets grow and children move out, premiums often become unnecessary and costly.
“As you get older and you have assets and the kids are out of the home, that life insurance also becomes prohibitively expensive. Look at what you’re getting out of it, because disability is arguably more important than life insurance,” says Baynham.
Brachner also points out that about 20 to 30% of your life insurance premium often goes to hidden adviser commissions. You can usually get the same cover for less by using a flat-fee adviser who removes them, he says.
When reviewing your policy, ask what share of the premium is commission, and if it can be zeroed out – and you’ll likely keep identical cover at a lower cost, says Brachner.
Brachner also says it’s important to understand how financial advisors get paid and whether this money comes out of your investment.
Don’t get stuck in the trap of conspicuous consumption, such as having a flashy car, as these are deteriorating assets, says Baynham. “That’s where keeping up with the Joneses hurts your investment returns.”
Baynham also has a controversial view on children’s education. Parents often feel pressured to fund their children’s university education in full, but that mindset can cause financial strain, she says.
“Your responsibility is to feed, clothe, and educate them through school – beyond that, tertiary fees should be their responsibility,” says Baynham.
If parents choose to help, it should be treated as a loan to be repaid. “I actually agree with setting aside money for my children. I think that’s fantastic – if you also put money aside for yourself.”
Byron Geddes, financial adviser at ASI Wealth, says: “We often see clients come in with budgeting apps and spreadsheets, which is great. But what they really need is someone to help them interpret that data, make strategic choices, and stay on track when life gets messy.”
Kayle adds that “we have all made money mistakes. Forgive yourself, learn and move on”.
PERSONAL FINANCE
