A Durban family of five has to make do with a grocery budget of R4 000 each month, including household and personal products
This means they do not have the balanced diet they should have; but with their other costs of living being inflexible, it is the only expense they can really cut back on.
Interestingly, the couple – Marian and Lisa Cunningham *, do not earn bad salaries. In fact, many people would consider their incomes to be more than liveable.
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“Yes, we could potentially reduce our spending on things that other people may consider luxuries, but if you really look at where our money is going, and take into account the fact that we work from home, these things are not really luxuries,” says Lisa, a graphic designer.
“Our eldest son has special needs so his school fees are quite steep, while our daughters go to really good government schools, meaning their fees are just over R2 800 each a month.”
Marian, a social media marketing specialist, acknowledges that they could send their younger children to cheaper schools, but says this is not an option they would ever consider as they want their girls to have good, solid educational foundations and a wide variety of sporting and cultural activities.
“Fortunately we both work from home so do not need to travel to an office, but fetching the three children from different schools – both out of their area, does mean that petrol costs are unavoidable.”
The fact that the children often finish school at different times owing to sports – so two trips out to school are needed some days – and that they travel to sporting events at least once a week, means that working from home does not result in reduced fuel costs.
The family rents a four-bedroom property for what Lisa says is a “very good” rental amount of R7 000, but they cannot afford to buy a property that will have enough bedrooms and garden space for their pets, for that amount. They would also like to move to an area closer to the children’s schools, but the rental prices are too high there.
“We are pretty much stuck where we are as we will not find another rental home for the amount we are paying.”
The household electricity bill is, on average, about R4 000 a month, which they find strange as they do not have air-conditioning or a pool, and sometimes their estimated usage lands them with a bill of R8 000.
“There always seem to be issues with the electricity billing,” she says.
The couple’s income has to also cover car insurance for their two vehicles – both of which they need due to the children’s differing school commitments and the occasional client visit – as well as vehicle tracking which they say is a necessity in South Africa.
What is left of their income is needed to pay for their son’s medication that is not covered by their medical aid, and data and cell phone costs that are needed for remote working.
“So as you can see, we are a little bit stuck in terms of having a choice as to what we spend our money on. Yes, we have pets, but they are like family so we cannot just get rid of them. And our children’s school fees are non-negotiables,” Marian explains.
“We do have one credit card but we do not use it regularly. It was needed to fund a very pricey emergency a couple of years back so we are paying that off. Obviously though, considering that we have little financial space to manoeuvre, we do have to dip into it for other ad-hoc necessities such as school trips or sports equipment, but we do not spend it on going out for meals or even taking the kids anywhere for a holiday or fun. So we don’t get to do those things.”
After all their debit orders, the family is left with R4 000 for groceries, which includes, food, personal toiletries, and household cleaning items. They allocate R1 000 a week to these, which works out to between R125 and R142 a day, depending on the number of days in a month, Lisa says.
“As you can imagine, with this budget for five people, it is almost impossible to buy certain foods. And food prices keep going up.”
They, therefore, rarely eat meat or hearty meals,
The couple has been trying to save towards a deposit for a home in recent years, but as they have almost no money left at the end of each month, this is impossible. Plus, even if they manage to get enough together, they say the chances are high that they will not get approved for a home loan due to their income and expenses.
MONTHLY BUDGET
- Family net income:R43 000
- Area: Umbilo, Durban
- Supports: 5 people
- Credit card payment:R5 000
- Groceries/household:R4 000
- Transport: R3 300
- Rent: R7 000
- Electricity: R4 000
- Car insurance:R1 580
- Vehicle tracking: R400
- Clothing: None
- Entertainment:None
- Eating out: None
- Child care: None
- School fees: R11 200
- Data/Fibre: R1 500
- Cellphones: R1 500
- Chronic medication:R2 300 (not covered by medical aid)
- Pet food: R1 100
Sharing some advice for the couple, Nicole Smit, product manager at FNB Money Management, says both Marian and Lisa have good skill sets and so could look at starting a side hustle.
“This could supplement their income and the funds can be used for a better quality of life.”
Other pointers she gives them and other South Africans struggling under financial pressure is to:
Maximise on loyalty/reward programmes
“Many banks have realised the financial pressure of the increased fuel price and have added various rewards to their loyalty programmes. Have a look at how they can ‘earn back’ on their fuel spend.”
People should also ensure they shop at loyalty/reward programme partners to maximise on benefits or discounts to help you free up cash and then pay for other expenses.
Insurance
“Shop around for a better insurance premium,” Smit says, explaining that savings could be unlocked.
“However, ensure that there is sufficient cover to protect the family, car, home and other assets
Bank smartly
Although bank charges weren’t mentioned, she says the couple could look at how they bank to ensure they bank smartly and therefore avoid paying unnecessary fees.
Electricity
Smit lists some ways people can reduce their electricity bills:
– Use a geyser blanket and turn the geyser thermostat down to reduce the cost of electricity to heat your geyser
– Switch off lights and appliances when they are not needed/in use
– Cut back reliance on tumble dryers.
– If utilizing a washer or dishwasher, do a full load
– Match the dimensions of a pot to the dimensions of the range plate
Groceries
Doing grocery shopping once a week to avoid extra trips during the week, Smit says.
“Make a list when shopping so that you stick to what you need and aren’t tempted to add things to your shopping basket. Buying certain pantry staples and household products in bulk like flour, sugar and washing powder can also help cut your spend. Shop around for deals, discounts, specials, and vouchers.”
Lisa and Marian – and other pet owners, could also save money by buying pet food in bulk.
Schooling
The couple, and others, could carpool for the school run and sporting events.
Cell phone and data spend
“Shop around for cell phone deals to see how you can save on your monthly spend. Instead of buying multiple small amounts of data, see if there are deals on larger data bundles that will last the full month.”
Once they have managed to free up some cash from the above behaviours, Smit says they can start saving towards an emergency fund.
“Small amounts count. Start with R50 or R100 so that when there are emergencies, they can be paid from savings instead of taking on expensive debt. They can also use the freed-up cash to start saving towards their goal of a deposit for a house.”
In this follow up article, the family responds to readers’ comments about their budget.
* Names changed for privacy
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