CAPE TOWN- Priya Naicker, advice manager at Old Mutual give five tips in which ordinary consumers should look out for when Finance Minister Malusi Gigaba gives his budget speech on Wednesday.
The finance minster is expected to try and meet the revenue shortfall of R50.8bn by raising personal income tax. But this is risky as there is already a high unemployment numbers and low business confidence, Naicker explained.
Priya Naicker tips for consumer:
1. While it may be tempting to spend on credit, consider purchases carefully against the total cost of repayment.
“Create a plan to reduce your debt that works for you, paying additional amounts to the most expensive debts first, or perhaps starting with those that provide the quickest wins for positive momentum.”
2. Plan for an increase – even if there not one.
South Africans should adapt to the tough economic environment and should factor at least 1 to 2 % growth in their personal spending.
3. Review luxury and discretionary spending
“An option Treasury may consider is introducing a tiered VAT increase. This means that VAT could be increased on premium items and services like cigarettes and alcohol,” she said.
4. Save, save and save again
“Whether used to cover emergency costs or to achieve our dreams and goals, saving is an important tool to create the life we want and protect us from expensive debt,” said Naicker.
“Partner with a financial adviser to craft a savings strategy that meets your needs and makes use of tax concessions where possible.”
5. Create a financial plan
“Combining attention to what you want to achieve with an understanding of your finances and taking action, is key to financial wellness.
“A financial adviser often brings the expertise needed to interpret economic factors within the context of individual circumstances to create a dynamic plan that is adaptable to changing circumstances.
Article sourced from News24
Photo Credit- Loanfin.co.za