Amid global and local economic challenges, the national budget is reviewed and updated annually, and so too should your personal budget be reviewed.

“In the same way that the national government takes a hard look at the state of the economy every February, and puts measures in place to strengthen it, consumers need to reassess their challenges and opportunities annually,” says Old Mutual Head of Financial Education, John Manyike.

Many families were hit hard by three increases last year: the price of fuel, electricity and VAT, he says: “For some people, the situation has become so desperate that they opt for a quick financial fix like a fast loan, or rely heavily on credit and store cards to simply buy groceries.” That only adds to long-term financial strain because it starts a vicious debt cycle, he explains.

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Manyike offers the following tips for a shockproof household budget:

  1. Commit to a budget

Make a list of wants versus needs, and focus on the needs. If and when you can afford to, you can set aside some money for one family outing or treat per month. “Educate your family about balancing a budget and get them involved with working out the family’s financial goals and financial plan.”

  1. Cut your transport costs

Look for schools closer to home if transport costs are high, or move closer to your workplace or children’s school. Alternatively, find a lift club or create your own.

  1. Keep your family healthy

Plan healthy meals for your family, including lunchboxes for school and work because this will reduce your takeaway budget, and cut back on medical expenses due to ill health.

  1. Quit bad habits

Stop smoking and cut down your alcohol intake.

  1. Stay up to date

Look out for the 2019 Budget Speech on 20 February and take note of any taxation changes that could affect your financial decisions. “[For example], properties under R900 000 are exempt from transfer duties altogether.”

  1. Keep saving

No matter what, don’t stop saving and make use of perks such as a tax-free savings account. “Stay committed to your long term goals such as a tertiary degree for your child and a comfortable retirement for you.”

  1. Don’t live to impress

Don’t put yourself under pressure by trying to keep up with the Kardashians, the Khumalos, or the Karims.

  1. Learn to say no to your children

Don’t let your children push you into buying things they don’t need and you can’t afford and teach them about budgeting, planning and saving.

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