Good news for South African workers

Old Mutual’s latest survey found that working South Africans are far more optimistic about their financial futures than many may believe.

The latest Old Mutual Savings and Investment Monitor revealed that 68% of working South Africans are more optimistic about their financial futures in 2024, up from 53% in 2020.

Howard Freese, a certified financial planner at Old Mutual Personal Finance, attributes this optimism to South Africans embracing diversifying their income sources. 

This shift is driven by the need to adapt to rising living costs and stagnant wages. 

“The expectation of improvement encourages proactive financial behaviour, while the ability to bounce back from setbacks helps individuals stay on track toward their financial goals,” Freese explained.

“For many of my customers, the realisation that one income stream isn’t enough has been a turning point.” 

“They’ve started side businesses, freelanced, or ventured into entrepreneurship. It’s a tough road, but it gives them control over their income and future”.

The 2024 Old Mutual Savings and Investment Monitor revealed that 57% of working South Africans now identify as ‘PolyJobbers’, taking on side hustles or freelance work in addition to their regular jobs, up from 50% in 2023. 

In addition, South African workers’ financial stress levels have decreased from 58% in 2020 to 37% in 2024, indicating the positive impact of improved debt management, budgeting, and saving habits.

Freese explained how this entrepreneurial spirit is driving financial optimism. The Covid-19 pandemic disrupted traditional job markets, leading many to seek alternative income streams.

“People are seeing that they can change their circumstances. When they start small businesses or take on extra work, they realise that even in tough times, they can find opportunities. That fuels their determination to succeed,” he said.

This drive is seen in the research paired with a growing commitment to better financial management, such as improved budgeting and debt management. 

“Optimism helps people focus on the future and the benefits of delayed gratification, such as saving for retirement or reducing debt, because they believe these actions will lead to better financial outcomes,” he said.

However, he warned that optimism without a practical action plan can lead to frustration.

“But when you channel that positive energy into budgeting, debt management, and saving, you see real results. That’s when optimism becomes a tool for transformation,” he said.

Freese offered several practical steps to financial resilience:

• Set clear financial goals and put a rand value to them. Without them, you’re hoping for improvement. With specific targets, like paying off debt or saving for retirement, you have something concrete to work towards.
• Start a side hustle or freelance. Diversifying your income with a side business or freelance work can provide additional financial security and flexibility. Explore areas where your skills can generate extra income outside your primary job.
• Manage your budget. A well-managed budget lets you track income and expenses, helping you make informed decisions about where to cut costs or allocate funds.
• “Pay” yourself first. Before addressing any expenses, set aside money in a personal savings account. Saving as little as 2% of your income can build long-term financial resilience, and seeing your savings grow can motivate you to keep going.
• Manage debt effectively. Prioritising debt repayment frees up cash flow and reduces financial stress, allowing you to focus on building your financial future.
• Cut non-essential spending. Minor adjustments, like cutting unused gym memberships or premium services, can free up extra money for savings or debt repayment.
• Work with a financial adviser. Advisers provide personalised guidance to help you stay on track toward your financial goals.
• Use financial tools. Tools like budgeting apps, savings and retirement planning calculators, and credit management platforms help you stay organised and build financial resilience by giving you greater control over your finances and decision-making.

“Overall, it’s not just about having hope. It’s about using that hope to act. Start small, stay consistent, and you’ll see results,” he said. 

“True financial wellness is within reach for those who believe in themselves and follow through with a plan.”