Due to rising costs and declining salaries, many South Africans face significant financial pressure, and a single emergency can set them back for years. Fortunately, small, free changes can help build up their finances.
More than 80% of middle-income South Africans have little to no emergency savings, with 27% having no accessible savings at all and over half holding less than a week’s take-home pay in reserve.
At the same time, rising living costs, high inflation and stubborn unemployment are squeezing household budgets.
Wise Move calculated that to live comfortably as a single person, South Africans need to take home R27,600 per month in 2025.
According to the Income & Expenditure Survey (IES) 2022/23, released by Statistics South Africa in January 2025, this is not a reality for most people.
The results of the survey showed that, on average, South African households had an annual income of R204,359 in 2023. This translates to about R17,029 per month.
The median household income, however, was R95,770 per year, or around R7,980 per month. This means that half of South African households were earning less than this in 2023.
To put this in perspective, this is less than the average price of a rental property, which costs an average of R9,132 in Q1 2025, according to Payprop’s latest Rental Index.
For most South Africans, their tight budgets mean that there is no room for things like insurance and savings.
However, when an emergency arises, this leaves these consumers incredibly exposed and can leave them in a much worse financial position over the long term, especially if they take out unsecured loans or withdraw retirement savings.
The same can happen to South Africans who are earning enough to afford a comfortable living, but do not prioritise saving.
Small changes go a long way
CFI Financial South Africa, led by CEO Zihaad Israfil, explained that small changes, from tracking spending to using free learning tools, can help every South African improve their financial future.
“In an economic climate where rising costs affect millions, financial empowerment is no longer a nice-to-have – it’s essential,” Israfil said.
Too often, people believe that investing or saving intelligently is only for the wealthy or those with a financial education.
Israfil stressed that the opposite is true. “Financial success is built through education, consistency, and the courage to take the first step.”
Anyone can improve their situation by shifting focus from fear to small, steady progress through practical steps.
He advised South Africans to start by mastering the basics: setting up a budget and knowing where every rand goes each month.
Using a simple app or spreadsheet to track expenses can reveal unnecessary costs that can be trimmed. Cutting even small expenses can create breathing room to begin saving.
With a budget, Israfil said the next steps should focus on debt and savings. “High-interest debt quietly eats away at financial progress.”
Paying more than the minimum on loans or credit cards can drastically reduce interest over time, freeing up cash flow.
At the same time, every household should build an emergency fund. Even a modest cushion can prevent a minor crisis from escalating into a financial disaster.
In this regard, consistency is key. “R500 invested every month may not seem like much, but it adds up over time with compound growth.”
Israfil recommended automating transfers to savings or investment accounts. Having a fixed amount moved into savings as soon as the pay hits the bank removes the temptation to spend first and allows savings to grow.
With those financial foundations secure, South Africans can begin to think about growth. Israfil stressed that investing isn’t gambling or a quick-rich scheme.
Today’s technology makes it easier than ever to start small. There are entry points for virtually every income level, from tax-free savings accounts to low-cost ETFs (Exchange Traded Funds) and retirement annuities.
He said the goal is not to chase market timing but to be consistent: even tiny amounts invested regularly can compound into a substantial nest egg over the years.
Those curious about investing can even open a free demo trading account to practice in real market conditions without risking money.
A demo account enables South Africans to test trading strategies and explore investment opportunities without risking real money, thereby building confidence and market understanding.
Importantly, everyone can learn; no advanced degree is needed. “The more you understand, the more confident you become.”
There are also plenty of free financial courses, community workshops, and online resources available. These tools are often available in multiple languages and mobile formats to reach South Africa’s diverse population.
“Tools like demo accounts, free webinars, and real-time market explainers can help remove the fear factor from financial learning.”
Israfil said that these steps are accessible to everyone, regardless of background. “You don’t need to be wealthy to take control of your financial life,” he says. “What you need is willingness, knowledge, and consistency”.
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