This paper models households’ vulnerability to becoming over-indebted by using insights from consumption theory to develop an association between household indebtedness and cashflow. We then estimate levels of vulnerability, evaluate why these households are vulnerable, and try and discern how they cope with vulnerability. Lastly, we evaluate changes in vulnerability over the course of 1995-1999. The findings suggest that the most vulnerable households in 1995 earn an income within the range of R10K-R25K p.a., and >R150K p.a. It was also found that there has been a decrease in the number of vulnerable households over the course of 1995-1999, though not in a Pareto-enhancing manner.