It is that time of the year when we start drawing up lists of what to buy, improve and adjust in our daily lives.
As easy as it is said, but being done is another. Expectations and excitement amount to a high during this time of they year, with children drawing up lists of what they want for Christmas, looking at those clothes you’ve been dying to buy for summer and those much needed improvements of the home.
But times have changed, the economy we thought we know 11 months ago has changed very drastically and has made us come to terms with the global financial turmoil which we are feeling the effect of, due to our international economic relations and global investments.
It is evident in home mortgage bonds, interest rates, food prices, and petrol prices that the effect is real.
“A lot of people do think about savings but unfortunately put it at the bottom of their priority list. At the same time we have seen an increase in debt exposure. That tells us South Africans are getting deeper into debt,” said Elias Masilela, SEB Chief Strategist and Chairman of the South African Savings Institute.
But the most important thing is being realistic about our financial situation. If this is neglected it could cause strenuous relations but setting realistic financial goals and expectations were key to ensuring people coped better with financial stress.
Not all this is bad news. Instead it gives us a microscopic view of how we need to be in the culture of saving for short and long term prospects.
Here is a “financial diet” you can try out:
Its guaranteed to work, if used appropriately.
- Draw up a budget. It will ensure realism about your spending habits and debt accumulation. Review this budget on a regular basis to determine if your goals need to change to suit the current economic times and lifestyle changes.
- Look for discount options from retail and food convenience stores.
- Start buying in bulk. Its cheaper and its lasts longer, as well as reducing transaction costs as trips to the shop are cut. But make sure to check the expiration date when you’re stockpiling, because it might take you a while to use them.
- Consider buying generic medication. Do you know that healthcare facilities buy generic medications in bulk supply to save money? Most medications given in the healthcare setting are generic. If the hospitals can save, so should you.
- Do your shopping during off season. Instead of buying summer clothes in summer rather buy them during the winter season, you will save a lot on this. Turn the sale sign to save.
- Saving to saving. If you have money in reserve for a rainy day, your child’s education, that dream holiday, or your retirement, you are better protected, you are better covered and best of all, YOU are in control.
“Consumers should spend wisely and avoid incurring more debt,” said Mpho Thekiso, Project Manager of debt counselling at the National Credit Regulator.
As July is set aside of the national saving month, let’s make saving an everyday obligation. As we go into the Festive season, let us ensure that we clearly and consistently differentiate between needs and wants.
Doing with less is best. Live within your means.
Written by: Zimkhitha Botha