By Kouthar Sambo
“If we have an increase in the repo rate (which we should have), it would be the tenth consecutive increase since the start of 2022 and that should give you an indication of the rise in the cost of living – the cost of borrowing money increases, the cost of debt increases, buying a home becomes more expensive,” says Consumer expert Moeshfieka Botha, who went on to say that because of this, it is important for consumers to know what they should and should not be doing in response to the rising interests rates.
Currently, people are paying up to 28% more on a bond and up to 30% more on a basket of food, leaving you with dramatically escalated costs while the prospect of an increase in income is looking rather slim says Botha.
“People start to do things like taking unnecessary insurances, and making more debt to pay off existing debt – don’t do those things. What you should be doing in response is commit to paying off your debt and become debt free,” proclaims Botha.
And while this is easily said and done, added Botha, this mindset is mandatory in rising above this financial adversity.
“Sometimes it comes across as condescending to advise people to create emergency savings funds, but you have to do it. You have to find solutions to your debt problems, but you can only find solutions once you acknowledge that you have a problem,” she added.
Taking an honest look at our financial situation and cutting costs where necessary will be the order of the day going forward.
“We have to start looking at loyalty cards and we have to start looking seriously on where we can cut costs – and that may not necessarily turn into money we can put away but can free up money. Remember, that South Africans are in a space where we pay up to 65% if not 70% of our disposable income on debt, and that leaves us with very little money to live on,” reiterated Botha.
Furthermore, the constant fluctuations in various economic spheres such as petrol prices, depreciating rand, and the effects of load-shedding on businesses are major contributing factors to the deterioration of the country’s economic growth.
“We cannot control the fluctuations, but we can control what is within our realm of control. That is our discretion regarding where we are spending. People are going to say that they can’t cut down more, but people who are still spending on items that are not necessities. We have to cut down on our spending. It is the only way South Africans can get any relief,” added Botha.
Source: Pexels
