As the festive season approaches, South Africans are preparing to spend big, with holiday budgets reaching record highs.
According to our seventh annual Summer Spending Survey, a staggering R284 billion is expected to flow through the economy during this festive period, with the average festive budget among respondents averaging R6,832—up 20% from last year.
But what’s driving this surge, and how are South Africans managing their finances? Here’s a closer look at the trends shaping the holiday season in 2024.
Spending Spikes Amid Economic Shifts
This year’s jump in spending reflects both optimism and economic realities. While recent interest rate cuts have eased financial pressure for 39% of respondents, inflation has pushed up the cost of essentials, from food to transport.
“South Africans are planning to spend significantly more this festive season,” says James Williams, Wonga’s Chief Marketing Officer. “However, it's concerning that some are dipping into retirement savings to fund their holidays, a trend likely influenced by the new two-pot retirement system.”
While some are splurging, others are pulling back; half of the respondents plan to tighten their belts this holiday season, with nearly 50% citing reduced income compared to last year as the reason.
Savings Take a Back Seat
Only 26% of respondents saved throughout the year to fund their festivities, a notable decline from 36% in 2023.
On the bright side, fewer South Africans are relying on credit this year—just 20%, down from 24% in 2023. This reflects a growing effort to avoid debt despite rising costs.
What’s Driving the Spending?
Food and Festive Feasts
Food and beverages continue to dominate budgets, accounting for 34% of holiday spending. With an average of R2,756 spent per person—up sharply from R1,907 in 2023—high inflation is clearly impacting grocery bills.
Travel and Transport
Travel is making a modest comeback, with 24% of South Africans planning holiday trips, up from 21% last year. Coastal destinations like KwaZulu-Natal and the Eastern Cape remain top choices, while international travel is on the rise, climbing from 2% to 3%.
Despite the uptick, high travel costs still deter many, with inflation cited as a major obstacle. Those who do travel are spending an average of 17% of their holiday budgets on transport, with road trips remaining the most popular option.
Gifting and Experiences
Gifts are another key expense, making up 14% of the average budget. Practical presents like cash and vouchers top the wish lists, while experiences like holiday accommodation account for 13%.
In-Store Shopping Makes a Comeback
In a surprising shift, online shopping has taken a back seat this year. Just under 18% of respondents prefer shopping online, while over 70% are heading to physical stores. Costly delivery fees, minimum spend requirements, and cumbersome return policies may be driving this trend, along with a desire to avoid impulse buys.
Looking Ahead: Prepare, Don’t Overspend
As South Africans navigate the festive season, financial experts are urging caution. “Before splurging, consider the increases in costs—such as medical aid and insurance—that are coming in 2025,” advises Williams.
While 2024 has been a challenging year for many households, there’s optimism in the air. Over half of the survey’s respondents are looking forward to the new year, buoyed by recent economic relief and a slowdown in inflation.
So, whether you’re splurging or saving this holiday season, it’s clear that South Africans are ready to celebrate—responsibly or otherwise. As the economy recovers and the festive spirit kicks in, the hope is for a brighter, more financially secure year ahead.
