Inflation is on the rise which is dramatically affecting the cost of living for South Africans. Food costs have risen, petrol is increasing, utilities (which are in short supply in South Africa) cost more and most importantly, the interest rates have increased on home loans, car repayments and debt in general.
Natashia Janse van Rensburg, Finance Manager at Sanlam Indie, says: “It’s important to remember that we have been through times like these before and during the pandemic time you’ve overcome many financial challenges. The key is not to panic, there are a few costs that you do control and refrain from cutting important essentials like medical aid and long-term insurance or policies.”
Here is a list of four things that might give you a little more breathing room during the tough times:
Align your spending with a monthly budget that defines where each Rand is going
Create a three-to-six-month budget which will allow you to regain control of your finances, setting yourself up for success might mean you need to – create a fresh budget for the upcoming months in the year. Once you have created or refreshed your budget, do your best to stick to it.
Where you have funds left, instead of keeping it in your bank account, move it to a short-term savings account, out of sight, out of mind. Having this savings account will give you future peace of mind, as rainy days do come. Doing these short-term plans will give you wiggle room for the movement of the rand as well as increasing the effectiveness of using a spending plan to match your spending with your goals.
Negotiate your rent payments
If you’re like most South African tenants, your rent is probably your biggest monthly expense. This means that it could affect your savings the most. Study the rental market in your area before you call your landlord. If your rent is much higher than what you could pay elsewhere, you’ll have more power when you go to talk about it.
To get the most out of your search, look at rentals with similar amenities. You want to show your landlord that you have compared apples with apples. If you are a good tenant, chances are your landlord would not want to lose you, and you have nothing to lose by trying. Should this option not work, and you have an ample choice, perhaps consider moving in the future with the view of the cost saving benefit thereof.
Reduce grocery and food expenses
Next to rent, groceries take up a huge chunk of our monthly budgets and with soaring food prices it’s imperative that we find more cost-effective ways of shopping. Comparing prices of your household groceries among different supermarkets and factory shops may seem incredibly tedious but it is effective and will help you keep track of price increases month to month.
Planning your weekly meals will help those impulse buys on a ‘quick take away’ that can cost the same as at least three days’ worth of lunches. With loadshedding, be smart, keep easy to make foods a part of your grocery list, so when the unexpected outage is announced, you have food in your kitchen that you can have ready in 15 mins or less. When compared to quick take-out dinners even if once a week, you can save hundreds of rands over one month alone.
Be considerate when it comes to entertainment costs
You could survive not going to that concert, theatre show or latest movie, but we aren’t here to suck the joy out of your life, however, we can take steps into identifying if you are overspending on those. Finding the source of your entertainment expenditures is the first step in reducing such expenditures.
You don’t need to have 6 different music streaming services, choose one or two that you enjoy and stick to those. Know which artists, shows are happening in the next six months and choose one to attend instead of all of them. These tips can be carried over into your other subscriptions like gyms, cell phones and magazines.
“You don’t save what’s left after spending. You spend what’s left after saving.” – Warren Buffet
