According to the annual Sanlam Financial Confidence Index (FCI), South Africans’ financial confidence had reached its highest level in three years, rising from 47 in 2024 to 53 (out of 100) in 2025.

However, by midway through 2026 South Africans were facing a major cost-of-living squeeze, high interest rates, and soaring fuel costs driven by global geopolitical tensions. The Bureau for Economic Research figures showed that consumer confidence plunged to -19 points in the second quarter of 2026.

In an environment like this, many South Africans will be looking to cut back on expenses just to pay their essentials. However, a bad choice now could potentially set back savings progress or create longer-term financial pressure.

“Under pressure, many South Africans reach for quick fixes that feel sensible in the moment, such as skipping debt repayments, cancelling life cover, or pausing retirement contributions indefinitely,” Hancox explains. “These decisions are often done without realising the potential impact to your credit rating in the short-term, or how it could impact your ability to retire comfortably.”

Hancox explains that a weakened credit profile makes it harder and more expensive to access credit in future, whether that is a home loan, a car, or even a consolidation facility that might otherwise have helped you get back on track.

Similarly, a cancelled life or disability cover may come as a relief in the short-term, but starting another up again requires underwriting from scratch. This means any health changes that occur in the intervening months can lead to higher premiums, reduced benefits or new exclusions on the policy.

Rather than taking drastic action, Hancox suggests that when money is tight, people should first make sure they are servicing their debt, at least by keeping up with minimum repayments.

“This is often important on high-interest credit, because it quickly erodes disposable income if left unchecked. At the same time, it is important to keep some form of saving going, even if the amount is very small, as this maintains the habit and helps build future resilience,” she says.

She also says that essential insurance should be preserved as far as possible, and that the real work often lies in examining the monthly budget for non-essentials – such as streaming subscriptions and convenience meals – which can often be cut back so that people don’t have to sacrifice their savings or vital cover.

While it may feel like the tough times last forever, the economy will eventually take a turn for the better, and Hancox says this is the time for consumers to course-correct.

“When the economy eases, the first priority should be to review monthly cash flow and ensure you are genuinely living within your means, resisting the temptation to turn every extra rand into new lifestyle expenses,” she says. “Rather use your new breathing room to rebuild a buffer in the budget, top up or restore the emergency fund, and then focus on paying down high-interest debt. After that you can turn your attention to catching up on paused retirement contributions or savings so that long-term plans get back on track before lifestyle upgrades do.”

There are practical steps you can take to become more financially confident. A great place to start is by watching the latest On24 webinar where you can learn more about how to clarify your goals, build your resilience against shocks, and take an holistic view of your financial wellbeing.

This article is for general information and education only and does not constitute financial advice. For personal recommendations, speak to a licensed financial adviser.