The optimism of those hosting in 2022 was quickly drowned out by the realization that the cost of living in South Africa will rise – again.
First, the Reserve Bank announced that the repo rate was raised by 24 basis points to 4%. If you have a home loan, that means you’ll pay more.
But even if you don’t own a home, the impact on your cost of living will always be on an upward trajectory.
Second, the Department of Mineral Resources and Energy announced on Monday that petrol and diesel would rise by 53c and 80c respectively, which it did on Wednesday.
Third, Eskom has proposed an incredible tariff increase of around 20%, which – if passed – will cause the cost of living to skyrocket from April 1.
Whoever you are will impact your bottom line at the end of the month, which means now is the time to start cutting costs smarter. Here are some simple tips…
Tip #1: Check your monthly expenses
Debit orders are often one of the biggest monthly expenses and we can be quite lazy to know how much money is clearing each month and where it is going. Now is the time to carefully review your debit orders and see what can be cut. Auto and home insurance, as well as cell phone charges, may be a necessity, but you could probably get discounted rates if you shop around a bit.
Tip #2: Ask about rewards programs
Your bank, medical aid, and outlets all have rewards programs to attract new customers and retain them. Enjoy! Reach out to your bank and brokers to make sure you’re getting the most out of your cashback and rewards programs, and prioritize buying from places that really give you value for your money.
Tip #3: Be energy efficient
Even if Eskom doesn’t get the 20% hike – which is quite possible – electricity will still cost you more in 2022. So start being more energy efficient! Replace your light bulbs with energy-efficient ones, turn off lights and fans when you’re not in the room, and enjoy a summer braai rather than cooking on the stove if that’s an option. A few small adjustments can go a long way.
Tip #4: Set a budget
I know, budgets… yawn! In fact, putting a number on your spending makes you realize where you are overspending. Go back to those student days when there was no credit card, it was what you had in the bank account and nothing more. Really assess how much you spend on living expenses and entertainment activities, and decide on a realistic amount to spend. Next, consider the emergency fund. This should be put aside in an account and not even looked at. It’s not savings – it’s emergency funds!
Tip #5: Spare change jar
It might make you unpopular with car guards, but sometimes visual saving is a great way to propel savings in other areas. Get a big transparent jar (don’t spend too much money on it!) and start putting your change (R1, R2, R5 coins) in it rather than just leaving it in your wallet. You can keep it as a backup for any unexpected expenses, or you can decide on something fun to do at the end of the year.
Remember that it is so easy to get caught up in the cycle of debt. buy something on credit and commit to paying it back later when you have more money – except you won’t. If you have debt, pay it off as soon as possible and start living within your means.
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