A good salary is not a debt plan

Ask most people who ends up in debt review and they picture someone on a low wage who ran out of money. Some are. But a surprising share of the people who come to a debt counsellor earn a salary most South Africans would envy, and their debts are often far larger.

My practice publishes anonymised figures from its debt-review applications as the South African Financial Pressure Index (SAFPI).

In the June to August 2026 window, 258 of 1 213 applicants (21 percent) took home more than R15 000 a month, and 178 (about one in seven) took home more than R20 000 (SAFPI, August 2026). These figures describe people who asked for help, not South Africans in general. But they show clearly who does ask.

The debt grows faster than the salary

Here is what the typical (median) applicant owes in unsecured debt, by take-home pay:

Source: SAFPI, Debt Solutions 4 U, June to August 2026. *Fewer than 50 applicants, so treat as indicative.

Someone taking home R5 000 to R10 000 typically owes R9 462, which is between one and two months' pay. Someone taking home R20 000 to R30 000 typically owes R142,106, which is roughly five to seven months' pay. Their median repayment of R12 227 a month swallows between 41 percent and 61 percent of that take-home pay before the bond or rent, school fees, fuel and groceries.

So the income increases about three times and the debt rises about fifteen times. A bigger salary did not protect these households. It let them borrow more.

Why it happens

Credit providers are required to assess whether a consumer can afford new credit, taking existing credit obligations into account.

The difficulty is that affordability is assessed at each credit decision, while a consumer's financial position can change over time. A credit-card limit increase, a personal loan and vehicle finance may each pass an affordability assessment when taken on, but the cumulative effect of several new commitments can leave a household with far less financial room than it had before.

This is one reason why a good salary can create a false sense of security: as income rises, so can the amount of credit a consumer is able to access.

In higher-income files the debt tends to arrive in big pieces. Across all applicants, personal loans make up 65.4 percent of the money owed and credit cards another 21.4 percent. Store cards, the account people worry about most, are just 4.6 percent (SAFPI, August 2026). A few thousand rand at a clothing store rarely sinks a household. A R150 000 personal loan taken to clear two credit cards, which then fill up again, often does.

There is also a lifestyle ratchet. Earn more and your fixed costs rise to meet it: a bigger bond, a newer car, private school fees, medical scheme for the family. None of it feels like debt. But it leaves less room when the variable costs rise, and in 2026 they have. The Reserve Bank raised the repo rate in May for the first time since 2023, which pushed up every instalment linked to prime at once.

Warning signs that apply to good earners

Smart About Money already has a good list of general signs that you have a debt problem. These are the ones I see most often in people on higher incomes, because they are easy to explain away:

You accept limit increases you did not ask for. A higher credit card or overdraft limit feels like a vote of confidence. It is more room to fall into.

Your overdraft never gets back to zero. If you are using it every month, it is not a safety net. It is part of your income, borrowed at interest.

Your bonus or 13th cheque is spoken for before it arrives. If a lump sum only resets your debts to where they were a year ago, the debt is outgrowing your pay.

You have a balloon payment coming. Vehicle finance with a large final payment keeps the instalment low now and moves the problem to the end of the contract.

You are thinking about a two-pot withdrawal to pay debt. Money taken from the savings component of your retirement fund is taxed at your marginal rate and gone from your retirement for good. If you need it to cover debt, the underlying problem is still there.

You are considering a consolidation loan to "clean up". Sometimes that makes sense. Often it only reshapes the debt. Smart About Money's guide on whether debt consolidation is a good idea is worth reading before you sign.

Work out your own debt numbers

Add up every monthly debt repayment, excluding your bond or rent, and divide it by your take-home pay. If the answer is climbing past a third, stop taking on new credit and make a plan. If it is past half, you are where the median debt-review applicant is. At that point cutting back on takeaways will not fix it.

The next step depends on your situation. You may be able to fix it yourself by stopping new credit, paying off the most expensive debt first and selling the second car. You may be able to negotiate directly with one or two creditors. Or, if you genuinely cannot meet your obligations, debt review is the legal process built for that. It has real costs and real restrictions, and it is not for everyone.

What I would say to anyone earning well and feeling squeezed is this: the salary is not the test. The ratio is. And the earlier you look at it honestly, the more options you still have.