Here’s what South Africans get wrong about spending, saving and survival
· Citizen
For years, a familiar narrative has shaped how we understand South Africans and their finances: they are over-indebted, under-saving and prone to conspicuous consumption.
Cowhan Govender, group head of personal banking at Standard Bank Personal and Private Banking, said this narrative is reinforced by statistics, the low household savings rate, rising unsecured lending and high levels of personal debt. On the surface, the conclusion seems obvious. But it is also incomplete.
Visit extonnews.click for more information.
“To truly understand financial behaviour in South Africa, one must move beyond spreadsheets and into lived realities in rural villages, townships and informal settlements,” he said.
“There, a very different story unfolds. It is a story not of reckless consumption, but of aspiration, resilience, and, in many cases, investment under constraint.”
Is it really conspicuous consumption?
Govender said homes financed through a traditional mortgage would correctly be classified as an asset, an investment in long-term wealth and stability. But when a home is built through personal loans or credit cards, it is too often dismissed as evidence of financial imprudence.
“This is not just a semantic issue,” he said. “It reflects a deeper structural bias in how we define ‘good’ financial behaviour, one that privileges access to formal, secured credit and penalises those who must navigate the system differently.
“Yes, unsecured credit can fund consumption, but it can also fund transformation. It builds homes where there were none. It pays school fees that unlock future earning potential.
“It buys vehicles that are not status symbols, but lifelines that enable people to access work opportunities, arrive on time and maintain employment in an economy where public transport is often unreliable.”
Govender added that in such cases, what may appear as conspicuous consumption is, in reality, a survival strategy and, at times, a form of long-term investment.
Savings invisible to the financial sector
He said the same misreading applies to how we measure savings. “South Africa is often labelled a nation of ‘dissavers’, yet this view relies heavily on formal financial data and overlooks a deeply embedded culture of collective saving outside traditional systems.”
Govender highlighted that stokvels continue to grow, mobilising billions across communities. Making reference to the National Stokvel Association of South Africa, he said more than 11 million South Africans participate in stokvels, with over R50 billion circulating through these schemes annually.
“This figure excludes informal schemes among families and friends,” he said.
“Because contributions are often pooled into a single account, only one account holder is visible in the formal system, making many savers appear absent in the data.
“What looks like low individual saving masks widespread collective discipline. This is not a failure to save, but a different model of saving.”
Spending patterns
Govender said investments in housing, education or small businesses are often not reflected in conventional metrics.
A household may show little liquid savings while actively building a home or funding education. It is actively investing in physical and human capital with long-term value.
“This raises a critical point: not all forms of saving are visible, and not all forms of consumption are wasteful,” he said.
“In fact, many South Africans who appear over-leveraged on paper may, in reality, carry smaller total debt burdens than those with access to secured finance.
“The difference lies not in the scale of borrowing, but in its structure. It’s shorter-term and unsecured, which certainly makes it riskier, but not inherently less purposeful.”
The issue is not failing to save
He questions whether the real issue is not that South Africans are failing to save or that they are investing poorly.
“Perhaps it is that our frameworks for understanding financial behaviour have not kept pace with the realities of the diversity of our economy,” said Govender.
“We continue to measure financial health through a narrow lens that overlooks informality, access constraints, and cultural practices.
“In doing so, we risk misdiagnosing the problem and misdirecting the solutions. To improve financial inclusion and economic resilience, we must start by acknowledging this complexity. Financial progress is not linear for many South Africans; it does not begin with savings accounts and end with asset accumulation.”