Durban - SA consumers have been warned that they could be under serious financial pressure in the new year if they don't stick to their budgets and save a little for tough times ahead.
Ina Wilken, consumer specialist and former chairwoman of the SA National Consumer Union (Sancu), warned that with the recent fuel price increase, and Nersa expected to make a decision on Eskom’s electricity tariff hike application next week, consumers needed to spend wisely and avoid wild spending this festive season.
“When petrol goes up, everything else goes up because the cost of transporting products increase. People will battle to get by if they are not wary of spending money on luxuries.”
Wilken advised that bonuses should not be considered extra disposable income but rather used to pay off debt and as a cushion for the long period between the December and January paydays.
Layton Beard of the Automobile Association said while they have found that there is a lot more traffic - particularly long distance travel - on the road over the festive season, it was difficult to determine the extent the fuel hike would have on people’s decision to travel or not. “What we do know is that the burden will be greater, we are looking at about R1.90 more per litre of petrol this year compared to the end of last year.”
This adds up when travelling but, Beard said, people are more likely to give up other things while on holiday like eating out rather than not to not travel at all.
Economist Francois Stofberg said it was not advisable to just focus on one or two items such as fuel or electricity.
“Other goods and services in the basket are decreasing or increasing at a lesser rate. Inflation is a lot lower than in the previous year so lots of products are becoming cheaper to buy than in previous years,” said Stofberg.
Junk status: Consumers will have to tighten belts
He warned that consumers should not get carried away with the festive mood and rather use any extra income to “build a buffer.”
“It’s always good to play good offence and defence. Don’t spend on things you don’t need and use the money to help yourself generate extra or higher income.”