Oct 10

How to navigate the rising living expenses

By Werner Afunde, Finance Manager, Capricorn Group

The writer Ryder Carrol wrote, “No matter how bleak or menacing a situation may appear, it does not entirely own us. It can’t take away our freedom to respond, or our power to take action.” This is an apt point of consideration when considering the current strain consumers, which means all of us are currently experiencing in the market.

Due to increasing food prices and interest rates, the current economic landscape has left the average consumer reeling and confused. A few years ago, numerous people qualified for and sought reasonably priced cars and asset financing, leveraging their employment packages. However, what one qualifies for now does not seem to align with what can be comfortably afforded, which has become increasingly evident recently. The increase in prime rates coupled with inflation has seen a spike in goods prices, thus putting many individuals’ affordability under pressure. This forces consumers to re-relook their spending habits as their current earnings may not sustain them. As such, budgeting and assessing one’s priorities has become more vital.

When reflecting on individual spending patterns, the concept of budgeting consistently emerges as the definite remedy. Without a doubt, budgeting does serve as a significant initial step, bringing some order to the madness. Navigating financial hurdles should commence with effective budgeting; a practice centred around a practical and sustainable financial plan. There are excellent ‘Personal budget’ apps and online templates, some conveniently available for free in Microsoft Excel, that can aid your budgeting process. These resources can be used to track every dollar you spend, from controllable to non-controllable costs.

Be accountable for your money by taking monthly steps to account for and track your spending. If you have overspent, assess why and whether you can rectify or absorb it in the following month’s budget or amend it where needed. Interrogate your spending honestly. I like to review my monthly budget weekly, specifically on a Monday right after the weekend. Usually, one may get carried away on weekends, so pulling up the bank statement, updating actual spending, and revisiting the monthly budget is an excellent way to ensure you are still tracking well within your monthly budget.

Self-care is also essential in humanity’s drive towards mindfulness, and you still need to spoil yourself at least a little. So, do not forget to budget for some “’/Na! enjoyment money!”. After all, you’ve worked hard for your money!

But what if you are already budgeting, cutting down on your expenses, and have fully stretched those dollars to their last stretch? Realistically, there is only so much one can cut back on. Hence, the answer lies on the other side of the equation – increasing one’s income. Consider adopting a dynamic concept of income since the current world presents an excellent array of possibilities to earn extra income. This includes digital platforms, i.e., market research data, survey completion, transcribing and much more. Understandably, there is always dread when one considers this because it stems from the fact that one is already working for most of the day. Also, there is little time to explore additional income-earning platforms, and sometimes, one is too tired to do anything else after an entire workday.

Approach this by seeing how you can monetise on activities you do in your free time, like hobbies, sports, crafts, or something more passive, like participating in market research data. We all have that one skill you have always wanted to master. Make time to learn and see how you can monetise on it (e.g., coding). Ensure that you do not become complacent with your outputs. Challenge yourself to do more and find new avenues to deliver your products or services. Adopt sound business ethics like good quality products and excellent service delivery. It always trumps everything else.

Navigating the current consumer challenges is not easy, but it helps to know that you are not alone in these pressing circumstances and that people worldwide feel the same way. There is always a silver lining around every dark cloud, whether it is for one to realise that perhaps it’s time to pursue a simpler, less materialistic lifestyle, push boundaries and develop a side hustle, or learn the lessons we never knew. Your circumstances do not define you because you have the power to change them.