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7 ways consumers can navigate tough economic times

There are budgeting tools available online to help you live within your means and not overspend. Photographer: Waldo Swiegers/Bloomberg

There are budgeting tools available online to help you live within your means and not overspend. Photographer: Waldo Swiegers/Bloomberg

Published Jun 22, 2022

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The fuel increase in June has had the predicted domino effect on the overall consumer price inflation despite the temporary R1.50 reduction in the fuel levy being extended.

Sbusiso Kumalo, chief marketing officer at African Bank, said: “With oil prices set to rise globally due to the war in Ukraine, South Africans will simply have to bite the bullet for the foreseeable future. It is now a case of reprioritising expenses, saving money and growing money through the right investment products.”

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Kumalo offers 7 tips for riding out the current economic storm and any other future slump:

1. Review your bank statement to determine your expenses and be honest in identifying what expenses can be downscaled or cut off.

2. Divide essential expenditure (rent, fuel, insurances) from discretionary expenditure (entertainment, subscriptions, travel). Money cut from discretionary spending can be put into savings.

3. Focus on repaying high-interest debt to free up savings in your budget that can be put into an emergency fund.

4. Put at least six months’ worth of expenses in a liquid and accessible account to cover emergencies, retrenchments or pay cuts. You can do this by making small contributions to a high-interest savings account or into a high-yielding investment account.

5. Start budgeting. There are budgeting tools available online to help you live within your means and not overspend.

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6. Don’t panic and jeopardise your long-term financial security based on short-term economic events. Stay consistent with your investments and savings, especially for retirement.

7. Leverage your earning opportunities by turning a hobby you’re good at into a lucrative side hustle. The extra cash could be an important way to boost your income.

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