A pulse check into the financial health of South Africans

2023 has been an immensely challenging year for the South African economy with a GDP growth rate of less than 1%. The stagnant economy is a result of lurking global tensions, stubborn issues with supply chains, intensified load-shedding, rising interest rates, and an increased cost of basics like food and fuel.

These issues have resulted in unreasonable pressure on the average South African consumer, who is facing the brunt of increased interest rates and fuel prices and is expected to pay more for their food because of inflation.

Many households with limited disposable income are struggling to stay afloat in this tumultuous period.

There is a strong correlation between financial stress and overall health

Given the state of the economy and our purpose as financial experts who do good, Nedbank wanted to understand the current state of financial health in South Africa better.

Financial health forms a large part of overall well-being. Given how stressful things are at the moment, there is a huge need to understand the role that good financial health can play in overall consumer well-being.

The NedFinHealth Monitor takes an in-depth look into a sample of South Africans to assess their financial health and then provide tangible recommendations to help improve the financial health of South Africans overall.

South Africans are under immense pressure

According to the Financial Health Network, financial health comes about when an individual’s financial systems allow them to bounce back from adversity and pursue opportunities that secure their financial future.

Financial health can be gauged by examining an individual’s ability to spend, save, borrow and plan. By looking at specific indicators under those 4 themes, the NedFinHealth Monitor sheds light on how South Africans fare on the index.

These scores are brought to life by additional data points that give insights into the financial behaviours and relationships with their spending, to offer a holistic view of how South Africans feel about their financial realities.

The role that financial health plays in overall health

Finances are an incredibly important part in defining holistic quality of life. They can be an empowering tool enabling choice, autonomy and growth – but when finances are not ideal, they can unravel holistic well-being.

In addition to exploring the financial health of South Africans, the NedFinHealth Monitor illuminates the role that finances can play on health by highlighting statistical correlations between financial efficacy and health, underpinned by psychology and behavioural economics.

Financial health permeates the decision-making process that ends up impacting the quality of our work and when we can retire.

Delving deeper into financial shame and seeking help

Financial shame can become the cornerstone of how we deal with adverse financial circumstances – it can also influence the way consumers try to get themselves out of those circumstances.

The report gives an in-depth analysis into what financial shame is. In addition, it gives tangible reasons why humans feel this way, and how that affects their propensity to ask for help, or to help themselves through various means.

This is the first instalment of this annual report. It creates a baseline, linking financial health with a variety of factors that will enable consumers better to understand how to improve their financial health. Download the full report to access further details and a wealth of information.