CAPE TOWN – “There is scarcely anything that drags a person down like debt.” American showman, politician, and businessman Phineas Taylor Barnum.
Many South Africans are living with debt. The weak currency coupled with political instability has resulted in some tough times for South Africans. Rising fuel costs mean it costs more to get products from A to B, this cost gets passed down the line to the consumer who has no choice but to pay. Although the cost of living is growing, many South Africans have kept their quality of living much the same as before. Where is the money coming from?
South Africans are combatting the high cost of living with loans, credit cards and store cards, in order to make ends meet.
This can result in psychological pressure. There are many factors contributing to depression, though there is no exact known cause. It can be biological, hormonal, genetic or attributed to medical illness or recreational drugs or medication. Numerous studies have also linked psychosocial factors with depression, including stress related to major life events such as the loss of a loved one, troubles with family, or financial concerns.
Research has shown that financial instability can not only lead to depression but can further negatively impact the economy as a result.
South African debt review and counselling company DebtSafe conducted a “wellness survey” on the health and habits of over 2000 people. It found that 71% of people surveyed said financial stress influenced their overall health, 65% of people were more stressed as a result of money worries, and 87% of respondents said they felt “tired for no reason, worried and depressed” because of debt.
According to the South African Depression and Anxiety Group (SADAG), depression affects around one in four South African employees.
About 400 million people around the world suffer from mental or neurological disorders, or from psychosocial problems, according to the South African Department of Health. These kinds of disorders range in severity and include disorders related to alcohol and drug abuse, acute stress disorder, panic disorder, depressive disorder, bipolar disorder, dementia and Alzheimer’s, to name a few.
October is Mental Health Awareness Month in South Africa. The focus is to educate people about mental health issues and “reduce the stigma and discrimination that people with mental illness are often subjected to”.
In South Africa, according to a study conducted by the London School of Economics and Political Science, depression costs the country more than R232 billion due to unscheduled absences from work or presenteeism (working while unwell or distracted).
Similarly, a recent report by Momentum Corporate, the Momentum Effective Employee Index, found that around 27% of employees go to work but are distracted, and that companies are losing an estimated R25 billion a year due to absenteeism.
Among the biggest distractions for these employees was struggling to cope with existing debt or unplanned expenses. The study recommended interventions such as employee debt management training, financial education programmes and flexible insurance benefits.
SADAG says it receives many calls from people who are overwhelmed by the stress of managing their finances, particularly over the festive season when many South Africans typically overindulge and sink further into debt as a result.
Jonathan Hurvitz, Chief Financial Officer of Teljoy, explains that it is too easy for people to live on credit, contributing to the debt problem and causing a vicious cycle of living beyond one’s means adding repeatedly to their overall debt, and leaving many unable to pay it off.
Teljoy aims to help South African consumers avoid unnecessary debt generated through the acquisition of necessary household items, appliances and electronics through their innovative rent-to-own model.
“The idea behind the rent-to-own model is to make these items affordable whilst enjoying financial flexibility with guaranteed maintenance. You don’t have to swipe your credit card, and you won’t be stuck with a product if it is faulty as risk and maintenance are included. You can also upgrade or downgrade depending on your circumstances. This means that you are not locked in like you’d be in the case of ordinary credit agreements, this is real financial flexibility with a lot of value” says Hurvitz.
“If you cannot afford the product anymore, you are able to send it back without penalties or cancellation fees, or, after the rental period, the product can be yours. But we have found that our maintenance plan offers value and peace of mind for consumers, so we also offer the option of keeping the cover for a reduced fee.”
Hurvitz calls on employers to assist their employees by educating them on debt management. Doing so can benefit both the employee and the employer, who may limit the impact in the workplace of the negative effects of depression.
Jonathan Hurvitz is the Chief Financial Officer of Teljoy.
The views expressed here are not necessarily those of Independent Media.
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