How to beat stressed economic conditions

After a breather of decreases in fuel prices in the past few months, South African consumers are now facing a shock with increases in fuel prices in the next few weeks.

Wikus Olivier, Debt Management Expert at DebtSafe, predicts that the average price increase for petrol as well as diesel will be almost a rand a litre.

Unfortunately, when fuel prices go up, it has an influence on all our daily living expenses. Combined with the recent interest rate hike, budgets are sure to feel the crunch. 

In the light of guaranteed increased monthly expenses, Olivier urges people to review their current budgets so that increased expenses on the one hand are balanced with decreased expenses on the other.

Let’s take the Radebe household as an example. Due to the interest rate hike and the fuel price rise, their expenses have increased by an extra R956.34 per month. But of course the Radebe’s income has not increased in equal measure. In fact, it hasn’t increased at all.

Failing to balance their budget means that they never account for this imbalance and after only six months, the Radebe household is in arrears by R5738.

 The excess portion of their spending has snowballed into extra debt in no time, and now they are considering something even more hazardous to their financial health: taking out a loan to cover their historic living expenses. 

The biggest mistake consumers can make is to carry on with out-dated budgets that do not take extra expenses into account.

“The accumulated overflow will eventually result in additional credit card debt which will be almost impossible to repay unless their income is also suddenly increased”, says Olivier. 

Now is the time to balance your budget by saying no to those luxury expenses that are tipping your budget over the edge such as fast food, pay TV, garden services, pool cleaning services and other luxury activities or items. 

Olivier adds that it might also be a good idea to reduce payments on investments or retirement annuities.

“And, if at all possible, try to earn an extra income – at least this will help meeting all your obligations,” he says.

DebtSafe recommends a few helpful tips to save fuel: 

• Use high quality fuels – Using high quality fuels will allow the vehicle to run more efficiently. Tests show that when you use high quality fuel, your vehicle’s economy can increase to up to 25km more per tank.
• Check your tyre pressure – Correctly inflated tyres results increased mileage of approximately 3,3 percent
• When approaching a traffic light, ease your foot off the petrol and anticipate the lights to go red, and by driving slowly already from a distance, you will use less fuel! The less you use the brake, the less fuel you use.
• Turn off your air-con – An air conditioning unit requires more fuel and produces increased fuel emissions.

DebtSafe ran a survey last year about spending habits and found that 51 percent of the participating respondents indicated that they were unable to pay their minimum debt repayments.

After the December holidays, an additional 13 percent of participants said they couldn’t make any payments. So if ever there was a time to review your budget and get creative with fuel savings, then this is it.

If you find that you can’t afford to make debt repayments, no matter how much you cut, (including vehicle and bond repayments) contact the credit provider to arrange a new payment plan.

Credit providers are not monsters – they also need your business and don’t want to repossess your assets.

Just make an arrangement and speak to them before you are in a position where you are unable to pay your full instalments with subsequent legal action from your creditors.

Want to receive news alerts via WhatsApp? Send us an SMS/ WhatsApp message with your name and cellphone number to 079 413 8726.

Familiarise yourself with our WhatsApp service disclaimer.

Do you perhaps have more information pertaining to this story? Email us at randfonteinherald@caxton.co.za (remember to include your contact details) or phone us on 011 693 3671.

For free daily local news on the West Rand, also visit our sister newspaper websites Roodepoort Record, Krugersdorp News and Get It Joburg West Magazine

Remember to visit our Facebook, Twitter and Instagram pages to let your voice be heard!