If you’ve always had more money than your month and have earned, spent and saved your money in a sustainable way, then you might very well ask yourself: Why should I budget? If you are in this fortunate position it’s very likely that you already have a good budgeting habit.
However, I find myself, every day, talking to people who need help with budgeting, and, the current economic indicators in our beautiful South Africa are suggesting that our skills in working with our budget are going to need serious attention!
Why is the economy changing?
We have seen some major changes, mostly due to the latest fuel price increases that will effect the costs of transport, basic necessities and luxury items to increase more than most of our incomes will increase. So even if you’re in that comfortable position of having ‘more than enough’, that might be about to change sooner than we’d all like.
Direct Axis recently published an infographic on their website that compares petrol prices all over the world in order to see if we’re paying a fair price for petrol. South Africa currently ranks 40, with the USA slotting in a little lower at 51. Turkey is the most expensive with Venezuela holding the least expensive in the world – only 11c a litre!
Whilst we’re fairly far from Turkey and most European countries, our average daily wage is lower than most of them. Germany, France, UK and the USA all have an average daily wage of over R1000, whereas ours is only R203. This means that the average South African is paying a comparatively higher cost for fuel.
And the costs don’t stop there… they will be reflected in any consumable item or professional service that relies on any form of road transport. Your plumber will charge more because he has to pay more to fill his car up to get to you. Your local supermarket will have to pay more to fill their delivery vans, which will be added to the shelf-price of all their items.
What does this all mean?
Thankfully these figures give us some foresight! It means that we can anticipate some steep increases in certain costs, which means that we can budget for them. One of the first areas that I always focus on with any client is to start repaying debt immediately and have a plan to pay it off in its entirety. A debt freedom plan is not some elusive fantasy, it can be your reality if you choose it. Also, if we have planned to cover certain costs, we will be less likely to increase our debt in order to cover those costs.
Apart from reducing debt, I also teach and equip people to increase and expand their income! Having a sustainable budget is not just about reducing your costs, it’s about abundance!
Whenever prices go up, debt increases. Unless you have a plan to repay your debt, it will keep following you around. I’d love to meet you and help you in your relationship with your money, register for one of our workshops or contact me directly.
