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This is how to stretch your rand in the most difficult financial circumstances our country and its citizens have ever been in. With inflation jumping by more than 1% in one month and a repo rate of 5.5%, consumers are forced to save wherever they can and this guide will help you to do just that.
In 2019, even before the onset of Covid-19, the South African Savings Institute (SASI) reported that household debt was staggeringly high, with three quarters of every rand earned going to pay debts, leaving households with very little left for living expenses and even less for saving.
According to Sebastian Alexanderson, founder and debt counsellor at National Debt Advisors (NDA), South Africans are notorious for being bad savers, but budgeting is a great way of taking control of your finances.
“When you budget, you know exactly where all your money goes, where you can make adjustments to save even small amounts, as well as how to effectively save and leave enough money for unexpected expenses and emergencies.”
Alexanderson says that by saving money, you can avoid debt, which in turn relieves stress. If you have overwhelming debt, seek help sooner rather than later, and address it while ensuring you keep your compulsive spending at bay.
“While many people understand the importance of budgeting, most have found that figuring out an effective budgeting method and sticking to it is often easier said than done. Nevertheless, budgeting doesn’t need to be complicated, nor should it take hours out of your day. In fact, the best ways to budget are often the simplest,” concludes Alexanderson.
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You cannot really stretch your rands if you have debts. Nobody can buy a house or car cash, but the best rule of thumb is still that less debt is the best way to save. Leave your cards at home when you go shopping and only take a debit card to e4nsure you do not buy what you cannot afford.
Also decline any offers to make more debt and pay as much as you can afford in addition to normal payments so that you can pay your debts off faster.
It is not a good idea to stop your insurance cover. “There is no doubt that many consumers see insurance as a grudge purchase, but it is a critical tool to protect our homes, cars and possessions,” says King Price’s client experience partner, Wynand van Vuuren.
He advises consumers to talk to their insurers, bundle their policies, review their current insurance, review their excess and reduce their risks to stretch their rands.
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Consumers are already trying everything they can think of to save on petrol as the price is so high. You can also stretch your rands on your car by:
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