M4JAM, a gig technology company, conducted a survey among it’s temporary and short-term workers.
They have found that the cost of living for South Africans has become a real problem.
Their findings indicate that household essentials like food, utilities and transport have increased significantly since the onset of Covid-19. Of these:
- 32% of respondents said their monthly costs had risen by up to R800.
- 17% had watched their monthly costs rise between R800 and R2000.
- A total of 10% said their spending on essentials had increased by more than R2000 per month.
- 84% said they reduced spending on essential items like groceries, healthcare services and beauty products to get by while 93% had cut back on non-essential items like fast food and alcohol.
Purchasing items on credit, extending payment terms, taking loans and accepting help from charitable organisations like churches were other ways South Africans were staying solvent.
People across all income brackets are being forced to change their financial habits, but according to Zak King, editor of Debtfree Magazine, living on less does not necessarily mean the end of the world.
“Having to cut your spending is never easy. We quickly become accustomed to a certain standard of living and often tend to spend more than we earn.
“When you suddenly have to live on less, it could make you feel that you are now going to have a hard, sad life of poverty.
“The sad truth is that millions of people live on a smaller income that you may now have.
“If your situation has changed and you quickly and wisely adjust your spending and lifestyle, you will find that you can avoid the growing pressure of living beyond your means on credit.”
Often a change in income helps you focus on what is really important in life.
The best, but often most difficult , course of action requires mentally acknowledging that your situation has changed – and then physically making the changes to your lifestyle to suit this change.
Like many other financial professionals, King advises that consumers do the most basic financial step first – which is to simply draw up a budget.
“A budget is not hard work, it can be as simple or complex as you want.
“It can take you two minutes or 30 minutes. If you know your figures then it becomes easier every month.”
You can work out a budget in one of two ways.
Put down your income and then subtract your debt repayments.
What is left is yours to spend on running costs each month.
By doing it this way, you prioritise paying back your creditors, so that they don’t start hounding and harassing you for money, which normally causes huge stress.
Put down your income and then subtract your household running costs for the month.
What is left is how much you have to split amongst your creditors.
This way prioritises the needs of your family, and then seeing which of your credit providers you can keep happy that month.
King adds that working together as a family when you’re forced to live on less can help reduce your personal stress.
“Trying to hide debt and loss of income from those closest to you is hugely stressful and becomes increasingly impossible to maintain.
“You much rather want to be in the situation where everyone is working together to keep costs down, and maybe not complaining as much about what they no longer have.”
It comes down to needs and wants.
Do we need the latest cellphone simply because a new one has been launched?
Do we need brand name takkies and clothing?
Do we need to impress others?
The answer for me is simply no, we don’t.
If there is one good thing that has come from Covid-19, it is that it has made us realise who and what is really important.
Life happens. Things change.
Be grateful for what you have, and realize that there are many people, not only in the world, but in your immediate community who are far worse off than you.
This will surely make the adjustment in lifestyle easier to achieve.