“It’s a struggle between paying rent or buying food.” Interest rates continue frustrating South Africa

When prices go up, people can’t buy as much stuff with their money. They do not have enough money left over for important things like housing, food and medical care. They may also lose value in their savings because of inflation which makes them worth less over time. If someone has investments that give a fixed amount of return – like bonds- the investment’s value could decrease because of inflation too! Lastly, raising interest rates will make it more expensive to borrow money so loans could cost even more than before. Simplified: Higher prices mean you can’t afford to buy all the same things anymore which leads to less extra spending power, especially on necessary items such as rent or healthcare costs becoming really big expenses quickly if this happens long-term. 

Beads Magazine had a chat with Siphelele Ngcamu and Nontuthuko about this frustrating subject. Gcamu, a secondary school teacher at Tholokuhle High School. He says he is very much affected by the inflation rate in South Africa .”My salary doesn’t go as far as it used to, which irritates me. Even though I’m working harder, my actual income is decreasing. Groceries, rent, petrol, and other expenses are all increasing, and my pay isn’t keeping up with this. I feel like I’m scurrying around, just scraping by. How am I going to pay for the items I need, let alone preserve money for the future? This worries me.” he said

Nontuthuko, a Tuckshop owner in Durban (Sydenham) is also feeling the pinch. “I recall the time when a loaf of bread cost only R9. It’s more than R20 now! Keeping up with the costs is difficult. I have to decide between making my rent payment and buying food. It’s a monthly fight. I worry about how I’ll make ends meet since I feel like I’m living paycheck to paycheck”

It is clear we have to buckle up. Here’s how you can adjust your budget to prepare for inflation:

• Monitor all expenses to understand where your money goes.
• Focus spending on essential items like groceries, housing, and utilities.
•  Reduce or eliminate discretionary spending, such as dining out or subscription services.
• Find cheaper alternatives for regular purchases.
• Allocate more money to savings to cushion against rising costs.
• Reduce high-interest debt to decrease financial burden.
• Consider investments that typically perform well during inflation, such as real estate or certain stocks.
• Contact service providers to negotiate lower rates for utilities, insurance, and other regular expenses.
•  Purchase non-perishable goods in bulk to save on rising prices.
• Implement energy-saving practices to lower utility bills.

Article by Nozuko