How to maximise your money in 2022

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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 % more in November 2021 compared to November 2020. Some items increased markedly, such as cooking oil (27%), eggs (15%), beef (15%) and margarine (10%). (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% for 2021. If you paid R1 000 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.

Here are 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 shower head 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.
  • Health care: 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. 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.

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