There are clear signs that the cost of living for South Africans will keep rising in 2022. This is because there could be a rise in interest rates, electricity prices, and certain food groups that are affected by changes in the market.
According to Rob Gwerengwe, CEO of FNB Middle Market, “Consumers have received various concessions over the previous two years to assist them in managing the financial burden of the pandemic.
“Banks extended financial assistance, and the SARB cut interest rates to record lows, while the government launched financial assistance programmes such as TERS to mitigate the pandemic’s impact.
“Despite these efforts, some households continue to face financial distress, and the rising cost of living will exacerbate the situation for many. As a result, consumers must plan ahead for some of the prices that will take effect this year.”
How to manage the rising cost of living in 2022
Gwerengwe offers the following useful tips to help you start 2022 on a good financial footing:
Living within your means: One of the golden rules for money management is to spend less than you earn. This will help you ensure that you’re not unnecessarily relying on debt to accommodate your lifestyle. The best way to achieve this is to budget properly to account for all your monthly expenses. Financial institutions such as FNB offer free digital tools on their App to help their customers manage their money with the click of a button.
Managing your exposure to credit: Being smart about how you use and manage credit can help you get more value out of it. This, however, starts with understanding why you need credit and what kind of credit is suitable for your needs. Whether it’s a credit card, overdraft, fusion or personal loan, each of the solutions offer different benefits and pricing considerations.
Use loyalty rewards: Meaningful rewards or loyalty incentives can help you save money, provided that you’re disciplined about your banking behaviour and the way you manage your money. Take eBucks Rewards for instance – you can earn and/or spend rewards on vital expenses such as fuel and groceries. All you need to do is try to figure out what you need to do to get the benefits.
Plan for upcoming expenses: While it is impossible to predict changes in interest rates and fuel prices, changes in the cost of insurance premiums and school fees are typically communicated well in advance. As a result, it is necessary to factor in these changes when planning your finances for the year ahead.
“Consumers should view 2022 as the year in which they recover from the financial shackles of COVID-19. After 2 years of living with the pandemic, it is important to start working towards financial prosperity instead of shelving one’s future plans due to uncertainty in the operating environment. This will not be easy due to the increase in cost of living, but many households have proven their resilience throughout the pandemic,” concludes Gwerengwe.