Every cent counts
21 Aug 2018 FINANCE
By Motlagae Konyana
With the cost of living increasing so often in South Africa, maintaining households is becoming extremely difficult and economists keep advising that we should tighten our belts but what does that really mean. Statistics South Africa reported on 18 July that the rise in headline inflation during June was primarily associated with the faster increases in the cost of transport.
According to a report by Price Water Coopers, private transport operation costs 13.5% year-on-year more last month, with fuel being 16.3% year-on-year more expensive. With the petrol price increasing, everything else becomes affected because everything requires transport to reach different markets – Bread would cost more because the bakery van needs to get to the different shops to deliver the bread. Every cent does count and Afropolitans have no choice but to tighten your belts in order to survive and one way to do that is to draw up budget and stick to the budget. These are things to consider when budgeting for your monthly expenses:
Be honest: Every amount must be accurate, from your total income to how much you have spent. Being honest can be extremely difficult if you are embarrassed about some of the things you may have spent money on.
Involve your family: If your budget doesn’t include just you, get the other parties involved so that everyone is clear on how much you can contribute. Start a family budget with your children, in the process you get to educate your children on saving and budgeting.
Have an emergency fund: Every budget must include savings for unexpected expenses. You need the equivalent of three months salary saved up to be comfortable should anything happen.
Review your budget: Before making a new budget, review the one you made the month before and compare – yes months wont be the same hence your budget will not remain the same month in and month out.