Decrease costs, increase financial security
South Africans who are unwilling to make radical adjustments to their spending patterns can actually harm their own financial security.
Understanding spending patterns (or financial pressures) and how to deal with them is particularly appropriate during Human Rights Month, says Mbuya. Financial security and human rights are intertwined, as evident in South Africa's triple challenges of poverty, inequality and unemployment. "Being entitled to the rights guaranteed under our country's Constitution can ring very hollow if you and your family are shackled by financial woes or worse, locked into a cycle of generational poverty."
One major risk, says Mbuya, is that large short-term debts can obstruct long-term priorities like planning for your retirement or saving for your children's education.
The accumulative actions - wise or short-sighted - of many breadwinners will have a powerful impact for better or worse on families and communities. Over time they can even affect the progression of our society and the development of our democracy
"Human rights remain a noble concept, but it's really just a concept if citizens work hard and earn decent money but can't improve their lives or enable their kids to improve theirs," adds Mbuye."So Human Rights Month presents a good opportunity for us to make some important financial decisions."
But what options do ordinary South Africans have when their living costs outpace their earnings? The first step, says Mbuya, is to know just how much you earn and spend each month. "Many people don't scrutinise their monthly expenses, and are surprised at how their hard-earned cash is eaten away"
The most widespread example of this is short-term debt and the punishing interest rates it carries. It's worth cutting back on nice-to-haves just so you can rid yourself of the debts on your credit cards and store cards. Many people realize that they indulge in luxuries out of habit and that they can adjust to living without them quite quickly.
"Forgoing the nice-to-haves may require you, for example, to trade in your dream car for something more modest. Resisting peer pressure and the desire to "keep up"; can play a role here. Many people see such luxuries and status symbols as a way to reassure themselves and their families that they've "made it" and are going places"
"It takes courage to examine your costs and cut those you can. But it's surely worth cutting back and saving a few thousand rand each month on car installments and petrol, so you can invest that money in your child's university education instead, for example."
In the long term, says Mbuya, there are vital steps people can take to insulate themselves from rising costs. The first is to build your financial behaviour around saving: save first and spend what's left, rather than spending first and saving what's left. The second is to get good advice. This is never been more important than in a time of rising living costs.