Consumers are urged to change their behaviour and prioritise their spending to enable them to cope with the high costs of living. The high inflation and interest rate environment, has seen many consumers battling to make ends meet.
Financial advisers say, avoiding unsecured debt as well as living within your means, could help consumers cope with increasing expenses.
The tough economic times have reduced consumer disposable income as salary increases have not kept pace with inflation. Consumers have been urged to differentiate between needs and wants, and to reduce luxury costs.
They have also been advised to eliminate debt amid high interest rates, such as unsecured debt. And that having an emergency fund of at least six months’ salary, could improve consumer savings.
Reviewing the different insurance offerings can also help in deciding which insurance you can do without.
Gradidge Mahura Investments Financial Adviser Munaf Mukadam explains, “Do not save towards a long term investment rather have an emergency fund as opposed to having a fixed deposit or a five year investment.”
Paying a bit more towards a home loan will help reduce the term and the interest a consumer is likely to be charged. And experts say you don’t have to buy a new car every five years. If you service your car regularly, it can last longer and help you save money.
“The idea of purchasing a vehicle every five years is a terrible habit that some people get into because they get used to that installment then when they are done paying for the car they feel the need to buy a new one and there is so much you can do. You can use that money to grow your wealth.”
Consumers are also advised not to invest conservatively like putting their money in a bank account as the growth is likely to be minimal.
Investing in growth assets that are linked to the stock market, will help to grow wealth and achieve financial freedom in the long term.
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