With a recession on the horizon, according to economists, making smart financial choices and having more than one source of income may help soften the blow, no matter what tax bracket an individual is in. FILE PHOTO: Karen Sandison/African News Agency (ANA)
South Africa’s economic woes are affecting even the relatively well-off. The country's small middle class is grappling with financial issues.
According to a study by Transaction Capital, this is largely due to debt.
According to the organisation, 34% of South African households will fall outside the middle class.
To be part of this group, you have to have a household income of R22 000 per month, says the University of Cape Town’s Liberty Institute of Strategic Marketing.
With a recession on the horizon, according to economists, making smart financial choices and having more than one source of income may help soften the blow, no matter what tax bracket an individual is in.
“Poverty has reached levels not seen for more than a decade, while inflation has increased to a 13-year high. The outlook is clouded with risks, and sustained reforms and investments are required to support better growth outcomes and poverty reduction,” said the World Bank in a statement.
The digitalisation of the world, on the other hand, has opened up a much wider range of opportunities to hustle on the side and potentially engage a much larger audience.
Having sustainable income streams in addition to a salary has become the norm, not just for the working class.
So, side hustles are important to a significant portion of South Africa’s mid- and high-income earners, reports landscape BrandMapp.
In a survey of people with a monthly income of more than R10 000, 43% said they have a secondary income, with 30% earning it through side hustles such as running small businesses, home industries, or working at jobs that are completely different from their main job.
“In 2019, 63% of our respondents had just one source of income, their job. By this year, that percent has gone down to 57%. In the current economic conditions, it would not be surprising if many of these side hustles are simply helping people make ends meet,” BrandMapp’s director of storytelling, Brandon de Kock said.
The vast majority (65%) of those with these side hustles were hybrid workers, explains de Kock. He said there are a number of reasons why this is the case.
“But I am sure one of the drivers is that fully employed people who are now working from home will feel less sheepish having a sideline without the boss looking over their shoulder,” he said.
“And the irony is that there’s plenty of anecdotal evidence to show that employees who are working from home are more productive than ever. So, the companies are winning, and so are their side-hustling employees.”
IOL Business