Standard Bank has warned that the 49-day gap between early December and January’s pay days, combined with heavy festive season and Black Friday spending, will put financial strain on consumers, leaving many struggling to stretch their incomes.
While November salaries are often quickly depleted on Black Friday sales, Standard Bank said December pay lasts slightly longer, but the challenge of balancing festive and New Year expenses remains daunting.
This as many employers pay December salaries as early as the 13th, creating a financial stretch of 42 to 49 days before the next payday in January.
The bank said entry-level earners spend half their December salaries in six days while higher earners take nearly twice as long.
“Customers take two to three extra days on average to spend 50% of their income compared to November. Higher middle-income and high-income earners take nearly twice as long to spend half their December income, about 11 days compared to six days for entry-level customers,” said the bank.
Black Friday shopping is a key driver of early festive spending in SA, with retailers recording an 11% year-on-year increase in the sales this year.
Black Friday shopping is a key driver of early festive spending in SA, with retailers recording an 11% year-on-year increase in the sales this year. More than R5.4bn was processed on FNB Speedpoint devices. Virtual card use increased by 59%, indicating a shift in consumer behaviour. Capitec customers spent R25.4bn, while Nedbank processed more than R3bn in individual and corporate transactions.
Absa reported a notable R638,000 transaction for overseas travel. By 8am on Black Friday, FNB’s transaction volumes had surpassed the year before, with peak point-of-sale activity reaching 454 transactions a second.
Standard Bank said entry-level customers tend to prioritise groceries in early December, while emerging high-income earners focus on clearing debts in November to make room for holiday expenditures.
Young professionals adjust their spending to include transport, groceries and dining out before Christmas, the bank said. Wealthier clients typically allocate more funds towards travel and insurance during this time.
As the festive season comes to an end, January ushers in a shift toward education (+0.7%) and savings (+0.1%) as households brace for the financial strain that often accompanies the post-holiday period.
The bank said: “Understanding spending habits is crucial, specially during the festive season when budgeting demands increase. Tools such as our Budget Manager and Money Movements provide valuable insights to help consumers budget effectively and avoid the post-holiday financial pinch.”
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