South Africans’ spending patterns have remained relatively stable over the past three years, with the majority of Standard Bank customers allocating similar portions of their total spend towards essential expenses like groceries, transport, digital connectivity, and entertainment, as they did in 2022. However, certain shifts in spending habits are becoming more evident, reflecting the ongoing economic pressures that many households are facing.
Declining expenditure on charity and family support
Standard Bank’s data, tracking the spending patterns of its retail customers, shows a decline in household spending on charity, donations, healthcare, insurance, family and home-related expenses such as home improvements and furnishings.
“Interestingly, transport costs have remained stable, despite fuel price hikes in the past 3 years, possibly due to ongoing hybrid work arrangements or adjustments in commuting habits to save on transport-related costs,” says Shené Mothilal, Solution Owner of Digital Money Manager at Standard Bank.
Rising interest and digital payments
A key trend in the data is the increasing share of spending going towards interest payments. This comes as no surprise, given that South Africa’s prime interest rate has been rising since late 2021, remaining high until the first 25 basis point cut in September, with another reduction in November.
Another notable shift is the rise in digital payments, as cash withdrawals continue to decline. “Consumers are increasingly turning to digital payment methods, in particular cellphone payments like instant money, for convenience. While these come with added fees, the introduction of Payshap has broadly aimed to reduce these costs, attracting more users to instant payment options,” says Mothilal.
Seasonal spending trends
In addition to these long-term patterns, there are some seasonal spending trends that are worth noting:
- Fitness & self-care: Spending in this category peaks in December, likely driven by New Year’s resolutions and holiday-related self-care.
- Charity & donations: This tends to peak in April, possibly around Easter when charitable giving is encouraged.
- Clothing: Clothing spend also spikes in December, likely due to the festive season and holiday shopping.
- Education: Education-related expenses peak in January and February with back-to-school costs, but there is also a noticeable spike in July as students prepare for the second semester.
- Entertainment: Entertainment spending follows the festive season, with peaks in December and January.
- Holiday & travel: Interestingly, holiday and travel expenses do not show the same strong peak during the festive season. This is likely because travel is planned and paid for throughout the year, rather than being concentrated in the final quarter.
“This data shows that, despite tough economic conditions, South Africans remain resilient. At Standard Bank, we’re using all available resources to help clients manage their finances with money management tools and dedicated advisors for Private Banking clients,” says Mothilal.
To help consumers manage their finances over the festive season, Standard Bank encourages customers to use digital tools in the banking app. Tools like Budget Manager helps you set spending limits on what you spend on, while Money Movements helps you understand if you’re spending at partner stores that offer UCount rewards and discounts, helping you manage your festive spend and reduce the January blues.
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