Continuous price hikes should not hamper financial goals
A budget is a living document that changes according to your needs and wants.
Following yet another electricity tarrif increase of 9.6% by The National Energy Regulator of South Africa (Nersa) comes the risk that many people can lose focus of their long-term goals.
Regional general manager at Momentum Fiona Teeling said the purpose of a budget is to control your expenses.
“It dictates how you spend your money instead of you wondering at the end of the month where it has all gone. However, there’s no point in trying to track every rand and cent, for example keeping a record of your monthly water and lights bill, unless you also change your spending behaviour,” she said.
There are steps that many people have already taken, to good effect, to reduce their electricity consumption.
For anyone who hasn’t done so yet, these tips are a good start as they target the biggest consumers of electricity:
• Replace your electric geyser with a solar-powered one.
• Replace an electric stove with a gas one that is much more economical.
• Do not use the geyser for more than two or four hours a day.
“The same philosophy applies to budgeting: target the biggest areas of overspending first,” said Teeling.
“The average family overspends in three main areas: eating out, impulse buying of fashion or gadgets, and entertainment.
“If you cannot reduce your electricity usage due to lifestyle issues or you’ve already done all you can, then keep an eye on how much you spend on those three areas each month and wherever possible, spend less on it.
“This is easy to do and can have a big impact on your monthly household costs.”
A budget is a living document that changes according to your needs and wants.
When adjusting it, keep the life goals you’ve set in mind. These may include saving for an emergency, settling outstanding debt, saving towards your own or a child’s tertiary education, a once-in-a-lifetime holiday or saving towards retiring in the country.
“If you are struggling to save money, speak to an accredited financial adviser to help you navigate your financial plan, starting with a budget,” Teeling concluded.
