Financial stress lowers global productivity by over R3.7 trillion per year
‘Januworry’ jokes abound but for many South African’s, their personal financial stressors extend way beyond the first month of the year. A reality brought to light by Stats SA, who showed a 4,5% debt increase in the three months ended November 2019 compared with the same period in 2018.
In a Sunday Times report, Paul Slot from the Debt Counselling Association said that 10 million people in SA had bad debt in 2019 – meaning they’ve missed three or more monthly repayments. He goes on to say that each of these people has approximately eight loans and on average, those in bad debt spend 63% of their after-tax income on repayments.
According to their latest survey, the Association found that people with bad debt are borrowing for daily necessities such as food and transport, and are cutting back on their medical aid and insurance policies. This was confirmed by the National Credit Regulator (NCR) – showing that 84% of those who earn R15,000 a month or more have some form of debt.
Financial problems do not only impact every facet of the lives of those affected, but also the organisations for which they work. It is estimated that a company loses two out of 20 days in production for every employee who suffers from financial problems. The productivity loss, due to physical or mental absenteeism, is equated to a staggering R3.7 trillion globally per year.
From employee wellness and business output perspectives, employers are in a significant position to assist in improving the financial well-being of their people and, in turn, their productivity.
Free To Grow’s Money Sense programme has equipped 23 669 employees with essential personal financial skills, providing not only key financial knowledge and skills, but also addressing the underlying values and attitudes toward money that shape spending patterns.
Money Sense does this by addressing the following key focus areas:
- Looking at money: your money personality and the role of money in building a quality life
- Making ends meet: steps to cutting costs and budgeting effectively
- Buying wisely: understanding credit, and when and how to use and finance it
- Managing your debt: coming to grips with debt and different ways to deal with it constructively
- Making your money grow: different saving options and the importance of setting goals
“Money Sense empowered the candidates with skills to improve and manage their personal finances. The practical exercises and case studies provided ample opportunity to create individual goals and action plans. It is not only to the point, but everything learned can be put into practise immediately. There is no better way to describe the impact of this programme than to say it’s Life-Changing.” – Annami Engelbrecht, Business Development Superintendent, De Beers Namaqualand Mines Kleinzee.