by A weak rand, more expenses, the threat of a recession and yet-unknown repercussions of BrExit mean it is time to make some clever budget cuts. But fortunately this can actually be quite a lot of fun.
Since June last year, the rand has been in steady decline further exacerbated by Nenegate, according to Morningstar data, despite recovering a bit against the pound after BrExit.
The ripple effects from South Africa’s weak economic position is in turn putting more pressure on disposable income especially related to buying imported goods, according to Public Policy Actuary at the Actuarial Society of South Africa (ASSA), Niel Fourie.
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However, with some careful planning and a little ingenuity, you can turn your cents around a few times more and stretch your monthly budget until ends finally.
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Choose a popular vehicle model
Your Toyotas tend to have more readily available new and secondhand parts owing to their popularity in South Africa, while your Renaults and Peugeots may be more costly to repair, as parts need to be imported on a demand basis. This means that if you are thinking about upgrading your vehicle, you will need to carefully research the cost of replacement parts and ensure you look at all the best car insurance policies and motor warranties before diving head first into a new purchase.
Local is truly ‘lekker’
When times are tough people tend to band together and help each other out a little more, which in turn creates opportunities, according to Peter Dempsey, deputy CEO of the Association of Savings and Investments of South Africa (ASISA). This is further affirmed by Deputy President Cyril Ramaphosa who explained the need for government and big business to buy locally produced goods to support our economy at his keynote address at the annual Proudly SA, “Buy Local” summit in Johannesburg earlier this year. Of course, where goods are locally produced, there may be some cost savings for consumers to reap as the goods have not been imported and priced as finished products.
While Chinese goods still rival those of local products in terms of price owing to mass production, buying local can also take the form of barters. One example is school jerseys which are pricey to buy from the uniform shop, but which can easily be replicated at a fraction of the cost by the best knitter in your circle.
Another good way to buy locally is to look for factory shops and effectively cut out the middle man. You can get anything from Elgin chicken to Woolworths clothing at factory shops. A good start is to buy Pam Black’s A – Z guide to factory shops and start exploring those shops in your local vicinity.
Buy bulk and eat in
Frightening statistics from the Pietermaritzburg Agency for Community Social Action (Pacsa) that tracks food inflation on 36 specific basic food items, show the cost of its January 2016 basket was up 9 per cent from the end of October 2015 – just three months. Fortunately the prospect of more rains promises to moderate food prices in the next year.
In the meantime, with the recent droughts pushing up the price of maize and meat, vegetables not only remain a viable alternative, they are also a lot better for your heart. A good tip is to buy these in bulk and share or barter with other families, or better yet grow your own.
While equally there is nothing wrong with the occasional meal out, restaurant owners are also feeling the pinch and pushing up their costs. Try to cut down on the number of times you eat out a month or look for weekday specials when you can’t be bothered to do dishes.
Reap rewards of less credit
Credit is expensive: we all know that. In fact, it can cost as much as 35 and a half per cent per year. That means that after less than three years, you’ve paid as much interest as your initial purchase cost. Try to pay off your store cards or capitalise on the sixty days interest-free period available on your credit card by settling your debts in a timely fashion. If you are considering taking out more credit, be wary of interest-free offers as well, as these may come with hidden costs such as administration and initiation fees. In other words, read the fine print carefully before signing any new contract.
Lastly, do not underestimate how much rewards programmes can help when you are struggling to survive the last week of the month. Most large retailers, as well as a number of medical aids and pharmacies, offer these cashback programmes.
