Johannesburg – People in South Africa are struggling financially. Food and fuel prices are soaring; electricity is getting more expensive despite constant load shedding; and interest rates have increased by thousands of rand for home and auto loans.
“Citizens in the country are collectively tightening their belts to cope with the rising cost of living,” said Peter Olyott, CEO of Indwe Risk Services (Indwe).
“Together with monthly budgets, saving goals, managing expenses, and picking up a side hustle, people are looking for other creative avenues to reduce their living costs without creating undue onerous exposures.”
According to Olyott, there are at least six practical ways to cut or optimise spending in order to lessen financial burdens:
∎ Transport
Transport costs can add up quickly with rising fuel prices. Attempt to reduce the amount of kilometres you drive by carpooling or ride-sharing with family, friends or colleagues. If you do so, keep your insurance company informed. Take into account insurances that provide lower costs if you drive less.
For continued efficiency, give your car regular maintenance and check the pressure in your tyres. To reduce the consumption of fuel, limit forceful acceleration and braking while driving. Combine your errands to save time and money, and perform larger, less frequent monthly grocery shopping.
∎ Groceries
Make a monthly shopping list and a weekly food programme to help you stay away from impulsive purchases. Look out for specials and loyalty savings, and stock up when you see non-perishable items on sale. Plan your meals around the deals at the grocery store, but also make sure to use the ingredients you already have in your pantry. Consider changing your protein choice, which is frequently the most expensive item on your list, and using basic ingredients to prepare a number of meals.
∎ Electricity
As we can go without power for up to three or four sessions a day, we are theoretically saving money because of load shedding. Change to energy-saving light bulbs, and wherever you can, replace old appliances with energy-efficient models. To use with your most expensive electronic devices, purchase authorised surge-protection devices. Although the initial investment could be high, you could end up saving thousands of rand.
To stop the loss of cool air in the summer and the loss of heat in the winter, seal your windows and doors. Develop better habits like turning off lights, putting a lid on your pot of boiling water, and unplugging items when not in use. Although switching to solar for heating and lighting can be expensive, over time it will lower your monthly power bill and keep the lights on during load shedding. And think about upgrading your cooking appliances to gas.
∎ Living space
You could lower your monthly expenses by downsizing to a smaller home or moving to a more affordable neighbourhood. Your rent or home loan, along with rates, utilities, and maintenance, make up a large percentage of your monthly spending. But, before you move, take into account the cost of moving, any additional costs, such as taxes or new furnishings, and the potential for longer commutes to work or school for your children.
If your house is large, another option to think about is renting out a room or getting a tenant for your garden or granny flat. You can offset rising prices with this new income, but don’t forget to simultaneously consider all the tax implications.
∎ Reduce extravagances
Possibly the most difficult to psychologically stomach is this one: while you should occasionally treat yourself, if you want to save money you need to keep your luxury spending to a minimum. Reduce your daily coffee takeout and prepare a pot at home or at work instead. Bring lunch from home to work instead of ordering takeaway, and make dinner at home rather than going out to eat. Cancel subscriptions that you aren’t using anymore and buy second-hand items instead of something new.
∎ Insurance and medical aid
People frequently resort to insurance and cancel their policies to ease their financial issues when looking for solutions to reduce their monthly expenditures. But because life is unpredictable, it’s impossible to know when a life-altering catastrophe will affect you and your family, putting you at risk of financial ruin.
“It’s also just as crucial to make room for savings. We highly recommend reaching out to an adviser or financial planner for advice, particularly when you want to save on your insurance. With motivation – from you – and guidance from an expert, you can make small changes that result in significant savings, enabling you to live a little more comfortably within your means,” said Olyott.
The Star