3 Money Myths South Africans Still Believe: Why They’re Wrong

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We hear financial advice from everywhere: from popular influencers on Instagram to your neighbour who managed to save enough for a deposit on a house.

But the reality often looks very different.

At the end of the month, you might have only R200 left in your account and are looking for ways to survive until payday. In this situation saving money feels almost impossible.

Maybe you’ve tried budgeting tips before.
Maybe you even managed to save an extra R1,000 one month, only for something unexpected to happen, like a car repair, and that money disappeared instantly.

That’s the reality for many South Africans.

The problem is: not all financial advice is actually helpful.

In fact, some of the most common financial beliefs in South Africa are myths, and they can quietly lead to poor decisions without you even realizing it.

In this article, we break down 3 common money myths South Africans still believe, and what you should understand instead.

Many South Africans believe that loans are always harmful, that they can afford what others can, or that borrowing means financial failure. In reality, these beliefs are myths that can lead to poor financial decisions if not understood correctly.

Myth #1. Loans Will Ruin Your Life

The belief: “Taking a loan will destroy your financial future.”

Why people believe this

This idea usually comes from:

• Stories of people falling into debt
• High-interest payday loans
• Fear of losing control over money

And to be fair, in some cases, that fear is justified. South Africa is facing real financial pressure. An estimated 10-12 million South Africans are considered over-indebted.

Many South Africans have either experienced this themselves or seen it happen to someone close to them. So the fear is understandable.

The reality

Loans themselves are not the problem. How they are used is what matters.

A loan can actually be helpful when used correctly. For example:

• Covering an emergency expense
• Paying for something essential you can’t afford upfront
• Managing cash flow during a difficult month

In these situations, a loan can provide stability — not damage. And you should always choose only NCR Registered lenders in South Africa.

When loans become dangerous

Loans can become harmful when:

• You use them for everyday expenses (like groceries or fuel)
• You don’t understand the interest or total repayment
• You borrow without a clear plan to repay

For example, some consumers now spend up to 69% of their income on debt repayments. This is when debt can start to spiral. 

Real-life example

Let’s say:

• You take a small loan for an emergency car repair so you can continue working. This can actually protect your income

But if:

• You take multiple loans to cover daily spending, it can quickly become unmanageable.

Key takeaway

A loan is not a life-ruining decision.

It’s a financial tool, and like any tool, it depends on how you use it.

Used responsibly, it can help you. Used carelessly, it can hurt you.

Myth #2. If My Friend Can Afford It, I Can Too

The belief: “If my friend bought it, I should be able to afford it too.”

Why people believe this

This mindset is more common than most people realize.

It usually comes from:

• Social pressure
• Lifestyle comparison (especially on social media)
• Wanting to “keep up” with friends or colleagues

When you constantly see others buying cars, going on trips, or upgrading their lifestyle, it’s easy to assume they can comfortably afford it.

The reality behind the lifestyle

What you see is not always the full picture.

In South Africa:

• A large number of consumers rely on credit to fund their lifestyle
• Many households already have high levels of debt
• Financial stress remains widespread across income groups

According to recent data, around 70% of South Africans report experiencing financial stress. 

This means the lifestyle you see is often financed, not always affordable.

What you don’t see

When comparing yourself to others, you don’t see:

• Their income level
• Their debt obligations
• Whether they are using credit
• Financial support from family
• Their savings (or lack of it)

Two people can live the same lifestyle, but be in completely different financial situations.

The real risk

Trying to match someone else’s lifestyle can lead to:

• Overspending
• Taking unnecessary loans
• Living beyond your means
• Increased financial stress

Over time, this gap can lead to long-term financial instability, even if the individual purchases seem small.

Real-life example

Your friend buys a new phone or car.

You think: “If they can afford it, so can I.”

But in reality:

• They might be paying monthly on credit
• They might have less savings than you
• They might be under financial pressure

And copying that decision could put you in a worse position.

A smarter way to think

Instead of asking: “Can I afford what they have?”

Ask: “Does this fit my budget and my priorities?”

Key takeaway

Your financial situation is unique.

Just because someone else can afford something, or appears to, doesn’t mean you should make the same decision.

Smart financial choices are based on your income, your expenses, and your goals — not someone else’s lifestyle.

Myth #3. Loans Are Only for People Who Are Broke

The belief: “Only people who are struggling financially take loans.”

Why people believe this

This idea is often driven by:

• Social stigma around debt
• Cultural beliefs about borrowing
• Fear of being judged for using credit

Many people associate loans with financial failure, rather than financial planning.

The reality

Loans are widely used across all income levels in South Africa, not just by people who are struggling. Personal loans are one of the most common forms of credit, and many consumers compare personal loans vs credit cards when deciding which option suits them best. This shows that borrowing is not unusual. It’s part of how many people manage their finances.

How financially stable people use loans

People with stable incomes often use loans strategically, for example:

• Buying a home
• Financing a car
• Paying for education
• Managing cash flow during large expenses

In these cases, borrowing is planned and controlled, not a sign of financial trouble.

Where the confusion comes from

The misunderstanding comes from how loans are sometimes used.

If someone:

• Borrows frequently for daily expenses
• Struggles to repay
• Takes high-interest short-term loans

Then it can look like borrowing = being broke

But that’s not the full picture.

Real-life perspective

Two people can both have loans:

• One uses a loan to invest in something important and manages repayments well
• The other uses loans repeatedly to survive month to month

Same tool, completely different outcomes.

A smarter way to think

Instead of asking: “Do only broke people take loans?”

Ask: “Is this loan helping or hurting my financial situation?”

Key takeaway

Taking a loan is not a sign of failure.

What matters is:

• Why you borrow
• How you manage repayments
• Whether it improves your financial position

Used correctly, credit can be a financial tool. Used without planning, it can become a burden.

Why These Money Myths Can Be Dangerous

Money myths might seem harmless, just opinions or beliefs people share. But in reality, they can shape your decisions in ways that hold you back financially. Research shows only about 51% of South Africans are financially literate, meaning nearly half lack the fundamental skills to make informed financial decisions.

They Lead to Emotional Decisions

When you believe things like:

• “Loans will ruin my life”
• “I should afford what others afford”

You start making decisions based on fear or comparison, not logic.

This can lead to:

• Avoiding helpful financial tools
• Overspending to keep up with others
• Feeling constant financial pressure

In reality, people sometimes make purchases to impress others rather than out of real need, often choosing expensive brands when more affordable alternatives would serve the same purpose.

They Can Cost You Money

Believing the wrong things about money can be expensive.

For example:

• Avoiding a loan when you actually need one could cost you opportunities
• Taking a loan just to match someone else’s lifestyle can increase your debt

Over time, these decisions add up, and affect your financial stability.

They Reduce Your Financial Control

When your decisions are influenced by myths:

• You react instead of plan
• You follow others instead of your own situation
• You lose clarity about what you can actually afford

This makes it harder to stay in control of your money.

They Prevent You From Learning

One of the biggest dangers is that myths stop you from understanding how money really works.

Instead of:

• Learning about budgeting
• Understanding interest rates
• Making informed decisions

You rely on assumptions, and that can limit your financial growth.

The Bigger Picture

In South Africa, where many households already face financial pressure, making decisions based on myths can make the situation even harder. According to DebtBusters, high-income earners use up to 85% of their income to repay debt.

That’s why it’s so important to:

• Question common beliefs
• Understand your own financial situation
• Make decisions based on facts, not assumptions

Key Takeaway

Money myths don’t just affect what you think, they affect what you do.

And over time, those decisions shape your financial future.

How to Make Smarter Financial Decisions

Instead of relying on common myths or advice from others, focus on building your own understanding of how money works.

Start with the basics:

• Understand how money actually works
• Focus on your personal financial situation
• Learn the real cost of borrowing (not just monthly payments)
• Compare financial options carefully before making decisions

The goal is simple: make decisions based on facts, not assumptions.

If you’re considering borrowing, always compare personal loans in South Africa and choose trusted, NCR-registered lenders.

Conclusion: Think Smarter About Money

Not everything you hear about money is true. And the more you question common beliefs, the better your financial decisions will become.

Remember:

• Loans are tools, not traps
• Your financial situation is unique
• Smart decisions come from understanding, not assumptions

In a world full of opinions, the real advantage comes from knowing how money actually works.

Want to make smarter financial decisions? Explore trusted options and take control of your finances with MoneyHello.