This year has been a financial nightmare for many South Africans, with dizzying fuel, food and electricity prices. This trend is expected to continue until 2022, as retailers and others in the value chain shift their business costs to consumers.
Even if people keep their jobs and get salary increases, it is unlikely that they will keep up with the cost of living.
A snapshot of price increases in 2021 reveals:
- Fuel: Gasoline increased by almost R6 / liter from January to December 2021 and exceeded R20 / liter. (Wheels24)
- Food: Baskets of common household food cost 6.3% more in November 2021 compared to November 2020. Some items have increased significantly, such as cooking oil (27%), eggs (15%), beef (15%) and margarine (10%). (Household Accessibility Index, Pietermaritzburg Economic Justice & Dignity group.)
- Electricity: The National Energy Regulator of South Africa (Nersa) has approved Eskom’s 15.63% increase in electricity for 2021. If you paid R1,000 for a certain number of electricity units in 2011 and used the same number of units in 2021 , the cost was R2 736.03 this year. (Cape Business News, June 24, 2021).
- Vehicles: The rise in prices has pushed many new vehicles over the price of 300,000 RUS.
Now it is more important than ever to plan ahead and put together a budget if you want to keep your head above water.
Here are tips for achieving maximum value in the eight areas we typically spend a large portion of our revenue on:
- vehicle: Service your car regularly, make sure the wheel alignment is in place and that your tires are properly inflated. Take advantage of the loyalty program and earn points for every liter of fuel you buy, for example Pick n Pay SmartShopper in BP. Accelerate slowly and drive at a constant speed.
- Grocery shopping: Avoid impulsive shopping, don’t shop when you’re hungry, consider switching to cheaper brands and compare prices – the most profitable store items are usually packaged at eye level, so take a look around.
- banking: Keep ATMs within your banking network to save on withdrawal costs. Banking applications save time and money. Try to increase the monthly repayment of the housing loan, in order to reduce the term and the amount of interest you pay. Avoid unnecessary cash withdrawals and choose the right account for your needs.
- Data: Use Wi-Fi whenever possible on a secure, legitimate source, disable auto-refresh apps, and update apps over Wi-Fi only. Look for data saving options in the app settings.
- electricity: Take a short shower and use a shower head that saves energy and water so there is less water to reheat, use the cooler water settings on the washing machine and dishwasher, choose energy efficient heaters and light bulbs and lower the thermostat on the geyser.
- Health care: Check your medical care plan to make sure it is still relevant to your needs and take full advantage of it. Use hospitals and pharmacies in an approved network. If you have a fitness tracker, connect it to your medical aid scheme to collect points for your fitness.
- insurance: Get numerous insurance offers, but keep in mind that the cheapest is not always the best. Read the terms and conditions to make sure you are adequately covered in the event of a robbery or loss. If you now drive less than 10,000 kilometers a year, due to working from home, you are probably entitled to lower premiums.
- Entertainment: Check what you’re paying for but not using anymore, such as music subscriptions and gym fees. Make Sunday purchases and reduce orders. Spend time in nature, gain free access to books and magazines at your local library and online, and look for special offers.
Examining your finances now and setting some realistic goals for 2022 will help you prepare for the inevitable challenges of the new year. If you have a financial advisor, this is a good time to set up an online meeting to review the year and make any necessary changes.
Shafeeka Anthony is the marketing manager of JustMoney.co.za.