MOTORING NEWS - The combined effect of the increase in electricity and fuel is likely to snowball into other expense areas.
Dhashni Naidoo, programme manager of FNB consumer education, says an increase in fuel impacts transport costs which has a cumulative effect on the price of consumer goods, such as food.
"This coupled with an electricity price hike will place a further burden on consumer expenses. A change in habits can go a long way in containing the extent to which consumers are impacted."
According to Naidoo, consumers will have to take practical steps to ensure they don't buckle under these increases.
Stick to a budget
It does not matter how much you earn, you should have a budget in place to manage your expenses. A budget will help you monitor how your money is being spent and areas that may require some adjustments. This is a good time to examine how much you spend on non-essential items, such as entertainment, with the intent of reducing expenditure on non-essential or luxury items.
It is important to be cognisant of needs versus wants when allocating expenses.
Consider a lift club
It may be worth considering a lift club to lessen the blow of the petrol price increase on your pocket. If there's a colleague who drives in the same direction towards your place of work, perhaps suggest travelling together in one car. If you remain consistent with this, over time you will notice you are spending less on transport as compared to when travelling alone.
Manage electricity usage
If you have electrical appliances that typically consume a lot of power, rather switch them off. For example, when you are at work during the day the geyser can be kept off to limit power consumption. The less power you use the less you pay. Another way of managing the consumption is switching off plug points when appliances such as a TV or microwave are not in active use.
Pay off outstanding debt as soon as possible. Often in difficult times we neglect payment on outstanding loans, or store accounts.
However, the long-term implications of this can be catastrophic for consumers and result in long-term financial distress. Reducing debt, will enable you to redirect those funds to savings.
Make room for savings
As costs escalate it will be more challenging to save, however it's important to always put something aside. Remember that it's not how much you put away, it's the principle of saving consistently that matters the most.
You can also create savings by shopping more economically, for example, buying bulk or shopping around for the cheapest price. Any reduction in spending is also a saving.
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