COST OF LIVING
School fees at the top of the stress class for South Africans
Those earning less than R5,000 a month were most stressed about paying debts and school fees. Those earning R35,000 or more were most concerned about interest rate increases.
Payment of school fees emerged as a top money stress factor, ahead of inflation and interest rates, for South Africans in DebtBusters’ second annual Money Stress Tracker survey.
More than 35,000 respondents who are not currently in debt counselling were included in the online 2023 survey.
Of the 78% who admitted to financial stress, 94% said it was affecting their home life and 78% their work life, while 77% believed it was affecting their health.
Short-term concerns continue to be the primary reason for this stress. Half the respondents said running out of money before month-end was their main worry. As one respondent so succinctly put it: “There’s more month than money.”
The payment of school fees as a top concern makes sense given that, two months ago, the TPN Credit Bureau reported that more than 40% of school fee accounts were in arrears at the end of December 2022. TPN further reported that 25% of parents did not make any sort of payment towards outstanding school fees.
Rewards programme School-Days offers parents and donors the opportunity to earn points which can be used towards school fees. The programme works via an app or online registration and you receive a membership, or School-Days Edu number, that allows you to earn points every time you shop at retail partners, including Dis-Chem and Baby City.
Unlike the popular MySchool Card, the School-Days rewards programme allows you to allocate points specifically towards your own family’s education fees. You can add up to four beneficiaries, up to two schools, the Adopt-A-School Foundation and/or your family.
According to Old Mutual, school fees for a child who started Grade R last year could amount to around R875,000 by the end of their 13-year public schooling.
“Parents looking to put their children through private schooling would need to account for R1.89-million on average,” the financial services giant says.
The DebtBusters Money Stress Tracker results tie in with the annual Old Mutual Savings and Investment Monitor 2023 released this week, which shows that 11% of South Africans have moved their children to less expensive schools.
Fifty percent of South Africans told Old Mutual they were saving towards their children’s education, up from 43% last year, and 29% were using a stokvel to save for school fees or to cover education costs.
Benay Sager, head of DebtBusters, says while all respondents said the biggest money stress factor was running out of money before the end of the month, the next concern for people 55 or older was having enough to retire. People between the ages of 25 and 44 were more worried about paying off debt.
In terms of income bands, those earning less than R5,000 a month were most stressed about paying debts and school fees. Those earning R35,000 or more were most concerned about interest rate increases.
“This indicates that the highest earners feel the impact of rising interest rates on their financial situation,” said Sager.
The Reserve Bank on Thursday held back on raising interest rates, although Sarb governor Lesetja Kganyago did not rule out further hikes. DM
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