This year has been a financial nightmare for many South Africans, with skyrocketing prices for fuel, food and electricity.

This trend is expected to continue into 2022, as retailers and others in the value chain pass on their business costs to consumers.

Even if people retain their jobs and receive salary increases, these are unlikely to keep pace with the cost of living.

A snapshot of 2021 price hikes reveals:

• Fuel: petrol increased by almost R6/litre from January to December 2021 and breached R20/litre (Wheels24)
• Food: a basket of common household foods cost 6.3 percent more in November 2021 compared to November 2020. Some items increased markedly, such as cooking oil (27 percent), eggs (15 percent), beef (15 percent) and margarine (10 oercent) (Household Affordability Index, Pietermaritzburg Economic Justice & Dignity group)
• Electricity: the National Energy Regulator of South Africa (NERSA) approved an Eskom electricity increase of 15.63 percent for 2021. If you paid R1000 for a set number of electricity units in 2011, and used the same number of units in 2021, the cost was R2 736.03 this year (Cape Business News, June 24, 2021)
• Vehicles: price increases have pushed many new vehicles over the R300 000 price point

“Now more than ever, it’s important to plan ahead and draw up a budget if you want to keep your head above water,” notes Shafeeka Anthony, marketing manager of personal finance website JustMoney.co.za.

Anthony offers tips for getting the most value in eight areas where we commonly spend much of our income:

• Vehicle: service your car regularly, ensure the wheel alignment is on point, and that your tyres are correctly inflated. Make use of a loyalty programme, and earn points for every litre of fuel you purchase, for example Pick n Pay SmartShopper at BP. Accelerate gently and drive at a steady speed.
• Grocery shopping: avoid impulse buys, don’t shop when you’re hungry, consider switching to less expensive brands, and compare prices – the most profitable items for the store are usually packed at eye level, so look around.
• Banking: stick to ATMs within your banking network to save on withdrawal charges. Banking apps save time and money. Try to increase your monthly repayments on your home loan, to reduce the term and amount of interest you pay. Avoid drawing cash unnecessarily and choose the right account for your needs.
• Data: use Wi-Fi whenever possible at a secure, legitimate source, disable automatic app refreshing and update apps over Wi-Fi only. Look for data-saving options in app settings.
• Electricity: take a short shower and use an energy- and water-saving showerhead so there is less water to heat up again, use colder water settings on your washing machine and dishwasher, choose energy-efficient heaters and light bulbs, and turn down your geyser thermostat.
• Healthcare: check your medical aid plan to ensure it’s still relevant to your needs, and make use of all benefits. Use hospitals and pharmacies in the approved network. If you have a fitness tracker, connect it with your medical aid scheme to collect points for your fitness.
• Insurance: obtain a number of insurance quotes, but keep in mind that the cheapest is not always the best. Read the terms and conditions to ensure that you are adequately covered in case of a robbery or loss. If you now drive less than 10 000 kilometres a year, due to working from home, you are probably eligible for lower premiums.
• Entertainment: check what you are paying for but no longer using, such as music subscriptions and gym fees. Do a weekly shop and cut back on ordering in. Spend time in nature, gain free access to books and magazines at your local library and online, and look out for special offers.

Examining your finances now and putting some realistic goals in place for 2022 will help you prepare for the inevitable challenges that the new year will bring, says Anthony.

If you have a financial advisor, this is a good time to set up an online meeting to review the year and make any necessary modifications. – Own Correspondent

National Treasury on Thursday pledged to cut the deficit and curb debt in its mid-term budget, saying it would not commit to new long-term spending despite a windfall from high commodities prices.

Africa’s most industrialised nation was hit hard by the COVID-19 pandemic last year, but its economy bounced back unexpectedly strongly in 2021 as global demand for its exports, such as metals, surged.

The Treasury now sees the deficit at 7.8 percent of gross domestic product (GDP) this fiscal year, versus the 9.3 percent  forecast in the main February budget, and gross debt peaking at 78.1 percent of GDP in 2025/26 versus the 88.9 percent seen in February.

The improved projections were influenced by a GDP rebasing by the statistics agency in August.

The Treasury said it would stick to a disciplined fiscal strategy and set a new target of narrowing the deficit to 4.9 percent of GDP in 2024/25.

The Treasury now sees GDP expanding 5.1 percent this year, compared to the 3.3 percent predicted in February.

“The economy has recovered more quickly than anticipated. Nevertheless, the recent spike in commodity prices, which has supported GDP growth and tax revenues, is considered temporary,” it said in its budget review.

“Government will not commit to new long-term spending in response to temporary revenue windfalls.”

The new pledges come a week after the governing ANC recorded its worst election result since taking power at the end of apartheid, securing less than 50 percent of the vote for the first time amid frustration over poor services and repeated corruption scandals.

The coronavirus crisis has prompted heated debate about whether the country’s already generous social protection programmes should be expanded.

But the Treasury said additional funding for social grants was dependent on revenue outcomes and a decision would be made by the cabinet in time for the February 2022 budget, sticking to the cautious approach for which it has become known.

“In the absence of faster, job-creating growth, it is essential to maintain social protection in a sustainable way,” it said.

The Treasury said it would provide R2.9 billion to state defence company Denel to help it repay part of its debt and that it had provisionally set aside R11 billion for state insurer Sasria in the wake of civil unrest in July.

Duncan Pieterse, a senior Treasury official overseeing asset and liability management, said Denel’s guarantee conditions meant the state had to step in.

Beyond the amounts to Denel and Sasria, the Treasury said there would be no new money for state companies over the medium term.

“We’ve got to practise tough love,” Finance Minister Enoch Godongwana told reporters, referring to efforts to put an end to repeated bailouts to state firms.

Godongwana, who was appointed in a cabinet reshuffle in August, said he was “broadly . . . on the same page” from a fiscal standpoint as his predecessor, Tito Mboweni. – Reuters