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The 2022 survival budget

Dec 29, 2021

The 2022 survival budgetAs if the last two years were not tough enough, there is no silver lining awaiting us in 2022. In 2021 we absorbed further fuel-price increases, a 15% hike in electricity costs, and an interest-rate increase of 25 basis points – and this is only the start.

It is unlikely that we will see salary increases keeping up with our rising bills, as companies face continued economic pressure and government commits to reducing the wage bill.

The economy is expected to continue to struggle under the continued Covid lockdown, with the October medium-term budget forecasting growth of only 1.8% in 2022.

While there may be an overwhelming desire to stick our heads in the sand and hope for the best by living off our credit cards, that is not a survival strategy. It is the fastest way to a financial crisis.

We have to take a cold, hard look at our household finances and make some adjustments.

Keep track of your spending

Write down everything you are spending. You will be surprised at the unconscious spending that is happening and where you can save several hundreds – if not thousands – of rands a month.

Stress test you budget

Last month the price of petrol went up by 75c per litre. On a 50-litre tank, that will cost you an extra R37.50 to fill up. The combined fuel price increases since May 2020 add up to a massive 67%, meaning that it costs R400 more to fill up the tank.

Any further weakness in the rand means we need to prepare for future petrol price hikes along with increases in the cost of food, as the price of fuel feeds into the cost of production. We can also expect to see further increases in the price of electricity.

Once you have written down a budget that accurately reflects your current living costs, add 10% to all of your essential bills, like groceries, electricity and petrol. See if you can absorb these costs and what you need to be cutting back on now to survive the year.

Remember to check your medical scheme increases – while many schemes will only be implementing those increases later in 2022 you still need to budget for them.

Bullet-proof your mortgage

While we still enjoy a relatively low interest rate, the Reserve Bank increased rates by 25 basis points in November and we are now entering a rising interest-rate cycle.

Economists expect an interest-rate increase of around 100 basis points during 2022 – and there’s a risk that it could be even higher.

You need to prepare to absorb at least a 100-basis-point rate hike into your prime-linked debt – this is usually your mortgage and vehicle finance.

By increasing the repayments on your mortgage and car finance from January, those extra payments will help reduce your debt and prepare you for those higher payments when rates go up.

If you are thinking of buying a home or a car, make sure you have built these future rates into your affordability assessment.

Go on a spending diet

Make a commitment to stop all impulse spending or purchasing of non-essential items for at least the next three months.

The best way to achieve this is to leave all credit cards and store cards locked away at home when you go shopping. It also helps to remember that when you buy items “on sale” that is not saving money – you are still spending, so don’t be tempted.

Also do not give in to the temptation to increase your credit limits – rather start by cutting back on your spending.

Work those loyalty points

Between the loyalty rewards programmes offered by banks, insurers, and retail stores, most people belong to some form of loyalty programme. It’s worth taking the time to understand the programme rules and find out what benefits you can utilise to get through the rest of the month. Fuel rewards are especially useful as the fuel price rises.

Review those monthly bills

When was the last time you reviewed your short-term insurance policies or your bank fees? It is a competitive environment out there, and given the cost of client acquisition, many insurance companies are prepared to lower their annual increase should you ask.

Bank fees, gym fees, and other subscriptions should all be reviewed as part of a budget-tightening exercise.

Start that side gig

The reality is that even with belt tightening, for many households the increase in the price of essential goods and services will not be covered by salary increases.

Most households will need to find ways to supplement their income. This does not have to be a major business venture, but can be something small to earn a few thousand rand extra to alleviate the pressure.

Is there a skill you have that you can use to earn additional income? Are your friends always asking you to bake cakes for their events? Can you use your car on the weekend to run errands? Or maybe you have a garage you can convert into a cottage?

Start thinking out of the box about ways to improve your cashflow.

Take action sooner rather than later

If your 2022 budget is not going to cover your debt repayments, don’t wait until it is too late and start missing payments.

Have a discussion with your creditors now about your options, especially when it comes to car finance and mortgages.

This article first appeared in City Press.


  1. Thank you for these fantastic tips and strategies. Financial literacy is an absolute must, more so now than ever. May we all begin 2022 newly invigorated and determined to get our finances in order. One day at a time.


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Maya Fisher-French author of Money Questions Answered

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