Concerns about high debt levels can affect entire families, and children growing up in financially stressed households are more likely to inherit poor financial habits and anxiety about money.
This is according to the National Debt Counsellors’ Association (NDCA), which represents South Africa’s largest and most experienced debt counsellors, and wants South Africans to deal positively with their burden of debt.
NDCA member data shows that the most financially stressed age group is 35 – 54, typically the age of parents with school-going or university-aged children. Seventy-seven percent of respondents aged between 35 – 44, and 76% of those between 45 – 54, reported feeling anxious or stressed about finances.
NDCA chairperson, Benay Sager, says that industry data shows over 60% of South Africans aged 45 and older are using more than 40% of their income to repay debt, leaving little room for savings, education or retirement.
“Not only does this put immediate stress on families living hand-to-mouth and unable to invest in their children’s futures, but a lack of retirement savings can pass this stress on to the next generation.”
He says that breaking the stigma around financial stress and seeking help early can break the cycle of generational debt. With both Youth Day and Father’s Day in June, this is the best month to seek help to break the cycle of generational debt.
“Debt counselling is a proven, structured, legal and responsible way for parents or caregivers to regain control of their finances, reducing the burden on them and protecting children’s financial futures. It can help families shift from survival to long-term financial stability.”
Industry statistics bear this out. The number of consumers who completed debt counselling has increased 11-fold since 2016.
NDCA members report that people who complete debt counselling are more likely to recommend it to family and friends, creating a ripple effect of family empowerment.
“When parents are financially stable, children benefit from less household stress, better emotional wellbeing and greater opportunity. In this context, debt counselling is not just about managing debt but creating a healthier home environment and a more secure future for the next generation,” says Sager.