Many South Africans have had to do more with less because of reduced disposable income, affected by the tax increase, rising food prices and rising interest rates.
Lee Bromfield, CEO of FNB Life says what they usually see during tough economic times is that people downsize or cut-back on some of their regular expenses to create more financial room.
“Unfortunately some people sacrifice in areas such as life or funeral insurance to boost their disposable income. This is NOT advisable because you forgo benefits when cancelling a policy, especially when you have been paying premiums for a number of years.
“Most policies have waiting periods and if you cancel and reapply you often start at zero. Additionally, whole life policies get cheaper over time for the policyholder and often, when you reapply you might get higher premiums. Even though cancelling your insurance may seem like the easiest option to take, it is a decision which should never be taken lightly.”
There are a number of ways to help you afford some of the things you should not do without.
Follow some of these useful tips:
Bulk shopping for basic goods
Retailers always have special deals which could save you a lot of money when you buy in bulk. Try to buy basic goods that will last you at least two months. You’ll be amazed how much you could potentially save.
Maximise loyalty schemes
Use store cards and rewards programmes offered by banks to your advantage. Try to accumulate as many points or discounts by being disciplined about where and how you shop. For instance, if you earn more points by using your bank card, do exactly that, consistently.
Make subtle lifestyle changes to save money
If you and your partner work along the same route, why not travel in the same car and save on petrol. If you use public transport to get to work, consider buying monthly bus trips which come at a relatively lower cost than most modes of transport.
Entertain at home
Going out to have a good time or to enjoy a meal is habit for some people but reality is that you could do the same thing at home and save a lot of money.
“South Africa’s economy is predicted to remain fairly tough in the short term so it is important to make smart financial decisions until things improve. With better discipline and willingness to compromise, you can avoid being forced to make drastic financial decisions such as cancelling life or funeral insurance,” concludes Bromfield.