Following the increase in petrol and electricity prices,
senior consumers will have to find ways
to adjust their budgets
Dhashni Naidoo, Programme Manager: FNB Consumer Education, says “The increase in petrol and electricity prices will heap more pressure on already stretched senior consumers’ finances. The combined effect of the increase in electricity and fuel is likely to snowball into other expense areas. For example, an increase in fuel impacts transport costs which has a cumulative effect on the price of consumer goods, such as food. This coupled with the electricity price hike will place a further burden on the expenses of senior consumers.”
“A change in habits can go a long way in containing the extent to which senior consumers are impacted,” adds Naidoo.
According to Naidoo, senior consumers will have to take practical steps to ensure they don’t buckle under these increases and she recommends the following:
Have a budget and stick to it
Irrespective of how much pension you receive, you should have a budget in place to manage your expenses. A budget will help you monitor how your money is being spent and areas that may require some adjustments. This may be a good time to examine how much you spend on non-essential items, such as entertainment with the intent of reducing expenditure on non-essential or luxury items. It is important to be cognisant of ‘needs’ versus ‘wants’ when allocating expenses. For example, if you are still working and not yet retired, you need transport when travelling to and from work daily so spending on transport is inevitable. Whereas if you are spending too much on entertainment such as movies and dining out, which is a ‘want’, you may have to relook this to ensure you are able to allocate funds to important expenses and still meet your financial goals.
Consider a lift club
It may be worth considering a lift club to lessen the blow of the petrol price increase on your pocket. Whether the trip in your car is going to the supermarket, or going to the movies, perhaps suggest travelling with other seniors in one car. If you remain consistent with this, you will notice, over time, that you are spending less on transport as compared to when travelling alone.
Manage your electricity usage
While the cost of electricity will go up quite significantly, households can manage what they pay by using electricity sparingly. If you have electrical appliances that typically consume a lot of power, rather switch them off. For example, during the day the geyser can be kept off to limit power consumption. The less power you use, the less you pay. Another way of managing the consumption is switching off plug points when appliances such as a TV or microwave are not in active use.
If you still have any debt, ensure you make arrangements to pay your pay off outstanding debt as soon as possible. Often in difficult times, we neglect payment on outstanding loans, or store accounts. However, the long-term implications of this can be catastrophic for consumers and resulting in long term financial distress. The sooner you can reduce debt, you are able to redirect those funds to savings.
Make room for savings
As costs escalate, it will be more challenging to save. However it’s important to always put something aside, no matter how small. Remember that it’s not how much you put away, it’s the principle of saving consistently that matters the most. You can also create savings by shopping more economically. For example, buying bulk or shopping around for the cheapest price. Share with a retired friend/s. Any reduction in spending is also a saving.
“Increases such as the petrol and electricity hikes can have a major impact on households, and require a change in attitude to how we spend and change to our consumption and financial behavior,” concludes Naidoo.
YEI readers – do share your hints and tips on how you save
with regard to fuel and electricity.
Share your views with us in the comments section below –
for the benefit of other seniors, pensioners and retirees.
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