The measurement is the debt ratio
When we talk about debt problems, many people imagine someone earning a low income and struggling to make ends meet. That certainly happens. But a recent News24 article highlights an important reality: debt distress is not determined by salary alone. The more important question is how much of your income is already committed to debt repayments.
Credit limits move with salary
In some cases, higher-income households are actually more exposed because a larger salary gives them access to larger loans and higher credit limits. As income rises, so can lifestyle expenses: a bigger home loan, a newer vehicle, school fees, medical aid, holidays and other fixed commitments. These costs may not feel like “debt”, but they leave less room in the budget when interest rates and living costs increase.
The stats point to debt distressed households
The article cites figures from the South African Financial Pressure Index, based on people who applied for debt assistance. It is important to remember that these figures do not represent every South African household. They describe people who were already seeking help.
Rise per size?
Among applicants taking home between R5,000 and R10,000 a month, typical unsecured debt was about R9,462. For those earning between R20,000 and R30,000, typical debt rose dramatically to approximately R142,106 — roughly five to seven months of take-home pay.
The most concerning figure is the monthly repayment. In the R20,000-to-R30,000 income group, the median repayment was around R12,227 a month. That consumed between 41% and 61% of take-home pay — before paying rent or a bond, food, fuel, school expenses and other necessities.
This is the key lesson: a higher salary does not automatically mean financial security. If debt grows faster than income, the household can become more financially vulnerable, not less.
Above one third becomes a problem
A useful personal calculation is to add up all monthly debt repayments, excluding your bond or rent, and divide that total by your take-home pay. If the result is moving above one-third, or 33%, it is time to stop taking on new credit and make a plan. If it is above 50%, the situation is serious and cutting back on small luxuries alone may not solve the problem.
Consolidating debt may mask the problem
There are warning signs to watch for: regularly using an overdraft, accepting credit-limit increases, relying on a bonus or 13th cheque to clear debt, or taking a consolidation loan without changing spending habits. Consolidation may reduce the number of payments, but it does not necessarily reduce the underlying debt.
Keep it real
The practical response is to stop taking on new credit, prioritise the most expensive debt, review major expenses and speak to creditors early. If you genuinely cannot meet your obligations, professional debt counselling may be an option, although it carries costs and restrictions.
The message is simple: don’t judge financial health by income alone. Measure the ratio between what you earn and what debt consumes. That ratio tells the real story.