Standard Bank has warned that the 49-day gap between early December and January’s payday, 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 depleted quickly 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 of 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 of their December income — about 11 days compared to just 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 these sales this year. Over R5.4bn was processed on FNB Speedpoint devices. Virtual card usage increased by 59%, indicating a shift in consumer behaviour. Capitec customers spent R25.4bn, while Nedbank processed over 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 already surpassed the previous year, with peak point-of-sale activity reaching 690 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.
The bank said spending in December records over 0.5% in clothing, more than 0.3% in fitness and shopping centres, respectively.
However, 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.
“Understanding spending habits is crucial, especially during the festive season when budgeting demands increase. Tools like our Budget Manager and Money Movements provide valuable insights to help consumers budget effectively and avoid the post-holiday financial pinch,” the bank said.
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