Guiding consumers since 2009

Adjust spending habits for Human Rights Month

By Staff Writer
Nicolette Dirk, finance writer, Justmoney.co.za
 
Ignoring the ever rising costs of fuel-price hike, interest rates and the general increasing living costs can carry long-term risks for breadwinners and their families.
 
This is according to Anele Mbuya, senior marketing actuary at Old Mutual, who said that understanding spending patterns is particularly appropriate during Human Rights Month.
 
“Financial security and human rights are intertwined, as evident in South Africa’s triple challenges of poverty, inequality and unemployment.

Being entitled to the rights guaranteed under our country’s Constitution can ring very hollow if you and your family are shackled by financial woes or worse, locked into a cycle of generational poverty,” said Mbuya.
 
He added that one major risk is that large short-term debts can obstruct long-term priorities like planning for your retirement or saving for your children’s education.
 
Dean Randall, debt negotiating manager at DebtBusters, said that short-term debt becomes a problem when people are not aware of the interest rate of the debt incurred.
 
Increase your earning power
 
When your living costs outpace your earnings, you should firstly know just how much you earn and spend each month. According to Randall, increasing your income or cutting down on expenses are the only ways to remedy financial problems.
 
“You can either work more hours or get an extra job. The problem is a lot of people are supplementing their income by making more debt. You should also reduce expenses buy shopping at a cheaper stores and getting rid of luxury expenses like DStv,” said Randall.
 
Mbuya added that it’s worth cutting back on nice-to-haves just so you can rid yourself of the debts on your credit cards and store cards. 
 
“Many people realise that they indulge in luxuries out of habit and that they can adjust to living without them quite quickly. It takes courage to examine your costs and cut those you can.

But it’s worth cutting back and saving a few thousand rand each month on car instalments and petrol, so you can invest that money in your child’s university education instead,” he said.
 
Make saving a priority
 
You need to insulate yourself from the rising cost of living and one way is through saving. Interest rates could be going up again and this means the interest on your investment will increase as well.
 
“Build your financial behaviour around saving. Save first and spend what’s left, rather than spending first and saving what’s left,” said Mbuya.

Recent Articles

Featured What to do when you’ve been denied a home loan

After months of scanning property sites and attending showhouse after showhouse, you’ve finally found what you’ve been looking for. But your dream of owning a home comes crumbling down when you receive the news that you’ve been denied a home loan. So, what now?

Can your retirement annuity be used as collateral for a loan?

If you have a retirement annuity, you may have wondered whether you can use this as collateral when you take out a loan. We decided to do the leg work and find out whether this is possible or not.

Best travel cards offered by top South African banks

Planning a trip abroad involves a lot of administration. You need to consider travelling arrangements, reasonable accommodation, and a daily itinerary. But have you considered how you’re going to pay your bills once you arrive? Besides considering bank costs, you also need to consider exchange rates.

Best ways to save your money short-term

For many, it seems close to impossible to save when spending on holiday getaways, Christmas gifts, while also trying to ensure there’s money left to survive January. Justmoney takes a look at the best ways you can save during the short term.

Deals

Marble Gift Card Special

Price: From R1000
When: Until 25 December 2019
Where: Johannesburg

Trennerys Hotel and Camping Januworry Special

Price: R950
When: From 10 to 31 January 2020
Where: Centane (Eastern Cape)

Bakwena Standard Packages Special

Price: From R999
When: Until 31 December 2019
Where: Nationwide