Helena Wasserman, News24 Business Editor
It's not just you. 2022 wrecked household finances across South Africa and the world.
South Africans were forced to make difficult choices as their incomes – already stretched by the pandemic - have not been keeping pace with price hikes, with inflation reaching its highest level in 13 years. A string of shocks fuelled rocketing food and fuel prices, while aggressive interest rates added thousands to home loan and other debt payments every month.
Here are the main contributors to the severe cost-of-living crisis, and what you can expect in the new year.
News24's Household Heroes
We spoke to three people from different backgrounds who are making their budgets work in creative ways. They share tips and tricks that make their money go further each month.
Are you a Household Hero? Do you have expert tips on how to make your money go further each month? Share your story with us, and you could win R5 000!
HOUSEHOLD HEROES | Gauteng granny doing the most for her family on just R900 child grant
Gladys Gumede stays in Pennyville with her 42-year-old son and three grandchildren, the youngest is three years old
"Life isn't easy, especially with the increased cost of living. My son does not work and the only money coming into this household is R900," she said.
The 66-year-old woman has tried to apply for a pension but has been turned down because of an error in her birth year made by the Department of Home Affairs.
"I was born in 1956, however, home affairs swapped the last two numbers of my ID. According to them, I was born in 1965, meaning I am 57 [an older person's grant is paid to people who are 60 years or older].
"When I had to use my ID to apply for the pension fund, I was told I did not qualify. Since then I've been trying to sort out the issue with my ID," Gumede said.
Adding to her existing financial struggles, Gumede said her son hasn't had a job for nearly a year, leaving a massive gap in their income.
According to Gumede, her son, who earned a weekly salary of R1 000, had to leave his job after he received an ancestral calling.
Since then, she has found herself trying to make ends meet with the R900 to feed the family.
Getting through the month
Gumede's grocery list never makes it past 12kg maize meal, soup bones worth R50 that last her for a month, and sometimes wors just so that she can reuse its oil for the rest of the month.
Her most incredible hack is pouring the wors oil into a margarine tub and storing it in the fridge to reuse it as cooking oil.
"Oil is so expensive I can't afford it," she added.
"Every week I visit the nearby tuck shop and ask for a roll of toilet paper, one sunlight green bar, salt, sugar, washing powder, and Vaseline, and I pay it off on the last day of each month.
"I do the same thing with sanitary pads, but I buy the two packs of nine to last the whole month," she explained.
"There is never a time where I get to say we are spoiling ourselves because I have little to nothing to save up. We have the same meal daily at my house, mainly pap and vegetables we've bought on credit or picked from a nearby veld."
"When the month ends, I must pay off my credit and create another credit. And so the cycle begins again," she said.
Tuesdays and Thursdays are, however, good days for Gumede's grandchildren because one of the community members hosts a kitchen soup where the kids can dish up and eat.
"That's when they get to vary their daily meal," she said.
Prioritising her grandchildren
Gumede expressed how much her grandchildren mean to her, and she goes out of her way to ensure they have everything they need.
She said piece jobs, like washing people's laundry, have helped put money in her pocket, allowing her grandchildren to buy things they desperately need.
"I might decide to buy a certain item for one child this month and then wait until the next month to buy the next item," she explained.
Gumede considers herself fortunate in that the children attend a government school that can cover their fees, books, and stationery, but the responsibility for their attendance falls on her.
"They have to walk to school every day because I don't have money for transportation. When it rains, they have to leave their bags at school to avoid getting wet," she explained.
HOUSEHOLD HEROES | Making detergent helps mom cut grocery bill in half
She makes her own washing liquid, buys cheaper cuts of meat and uses rendered chicken fat for cooking. These are some of the cheats Michelle Linnert of Eerste River, Cape Town used to cut her grocery bill from R6 000 to R2 500.
Linnert, a married mom of three, is a freelance writer and her income differs from month to month.
“There are certain things where you need to let your standards drop. When your family needs to eat, you don’t sniff at the brand of beans. Actually, you will find the cheaper ones are sometimes equally if not more delicious.”
When she goes shopping, she sticks to her budget.
“I go to various stores after I have done my discount homework. I am the pamphlet queen,” she quipped.
Two-ply toilet paper is only purchased when the difference in price is minimal. And coffee creamer has cut their milk expense by 75%, as cereals are phased out and replaced with mielie meal and oats, which they love.
“When I splurge, I buy things like olive oil and balsamic vinegar, but the last time I purchased that was eight months ago,” she said.
“But what I won’t drop my standards on is coffee. I will not put my lips on Ricoffy or Frisco, thank you very much. I purchase either Nescafe, Jacobs or Douwe Egberts, whichever is on special.”
She saves on fresh produce by growing her own vegetables – she has spinach, potatoes, carrots, onions, herbs and tomatoes growing in her front yard.
Linnert limits her shopping trips to once a month, saving on petrol. The family no longer enjoys afternoon drives owing to the crippling petrol price, but finds wholesome activities to do at home instead.
One of her biggest cost savers is making her own laundry detergent for her family’s washing. Linnert finely grates one bar of Sunlight soap and mixes in one cup of baking soda, dissolving it in two litres of hot water and adding eight litres of cold water. She then stirs it until it liquefies.
“It has a slimy consistency but lasts up to three months, using two cups per load.”
To cut down on meat expenses, she buys cheaper cuts and offal, like chicken necks and livers.
“If you invest in a variety of spices, you can make magic, even with something as basic as rice.”
She feels a sense of accomplishment when she ends up under budget after her monthly shopping trip.
Then she rewards herself with a “skelm cappuccino”.
HOUSEHOLD HEROES | Buying cheaper brands and shopping in bulk- how one woman lowers grocery bill
"I go for the 'no name' brands because a lot of the time, people don't know the difference. If you don't tell them, they won't know, so I usually do this when it's rough."
This is how Matshidiso Mthabela, a Soweto mother of one, manages to lower her monthly grocery bill.
Mthabela lives with her retired mother, younger brother, and daughter and has been the sole breadwinner in her home since 2018.
She told News24 that although she is permanently employed as an executive assistant at a major corporation and has a consistent income, the rising cost of living makes it challenging to stick to a budget for groceries.
"It depends from month to month. Sometimes you set a budget, thinking you will spend R1,000, and when you get [to the shop], you find that you're already over the specified amount, and your trolley isn't even full," said Mthabela.
Basic food items, including her child's cereal and daily essentials such as bread, milk, eggs, maize, and rice, are always at the top of her list.
"Those are the things I prioritise, and everything else I buy last if there is some money left," she said.
Mthabela spends R2,000 on monthly groceries, excluding meat. She buys chicken and canned fish, which she says cost less than red meat.
Mthabela doesn't buy full grocery items monthly, which she attributes to bulk buying.
In some months, she spends less and 'tops up', meaning she only gets the essential food items that have run out. This month's end will be one of those.
"Usually, with the top up, I spend between R500 to R800. I buy daily essentials like fruit, vegetables, milk, cereals, and spices. At certain supermarkets, they often have combo deals, and they last," she said.
Although she buys less cereal for her daughter, she doesn't compromise on her favourite treats.
I have had to cut down on cereal. I used to buy three boxes of different kinds, and now I buy two. I always spare time to treat my daughter to ice cream or even a burger because I don't want her to feel deprived of such things.
"We also recently bought an air fryer, saving money I would have spent on cooking oil. Nowadays, the 750ml or 1-litre bottle of canola or olive cooking oil lasts for two months."
Mthabela also often has her eyes peeled for specials and lower-priced items.
In March, she scored bulk cleaning detergents for R800, which have not yet run out.
She said she hardly cooks more than once a day.
"I cook every day, and I think we are disciplined because there is always bread in the house and there are noodles, so, at most, I cook once a day, and rarely twice a day. If someone wants a cooked breakfast, they will cook," she said.
Red meat, milk, and cooking oil are the items which she has seen rising in cost most consistently.
She has been spending less on petrol since working remotely at the height of Covid-19 in 2020.
"I drive a very small car and I spend R150 on petrol to drive to and from the office," she said.
Her other expenses include electricity which can cost as much as R400 a week in winter.
She also spends R950 monthly on her daughter's transport to daycare.
The cost of living in graphs
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Cutting down: Citizens share which items they've removed from their shopping lists
14 ways to save money as price hikes bite - from geyser blankets to DIY
1. Invest in a geyser blanket
With winter upon us, hot water is one of the costs that generally go up quite noticeably, and the geyser is a good place to start, says Neil Roets, CEO of the debt counselling firm Debt Rescue.
Invest in a geyser blanket, to retain the heat so that it doesn’t heat up that frequently. Also, review the thermostat temperature, and look at investing in a timer so that it only heats up when the geyser is in use, Roets says.
Also, save electricity costs by replacing globes with LED lights, says Marius Fenwick, a certified financial planner with WealthUp. In rooms with multiple lights, remove some of the globes and switch off lights that aren't necessary.
2. Plan your grocery shopping
It’s easy to get caught up when doing grocery shopping and end up overspending on things you didn’t even plan on purchasing in the first place, says Michael Haldane, managing director of Global & Local Investment Advisors.
To avoid overspending, plan your meals a week beforehand. When doing this, check what’s left in your pantry as you might find an extra tin of coffee or baked beans that you can tick off your list, says Haldane.
"Another thing to do is to stick to what’s on your list, especially when walking down that luxury isle with all your favourite chocolates. Temptation is the biggest enemy as you end up buying things you do not need but want instead."
Roets’ tip is to check the community newspapers for specials on offer, and centralise shopping, so that you only shop at stores in close vicinity of one another – that way you end up saving on fuel and your grocery bill.
Buy in bulk, and switch to cheaper house labels where possible.
3. Pay with cash
Studies show that most people tend to spend more when using their credit card because it doesn’t make them feel like they’re overspending, says Haldane.
"When you carry cash, you will stick to spending what you have. Once this becomes a habit, you will start planning your expenses beforehand and carry just enough for your needs leaving no room for excessive spending."
4. Don't buy lunch
Make food at home for schoolchildren and working adults. Don't buy lunch or take-out during the day simply because it is convenient, says Ryno de Kock, head of planning and advice at Consult by Momentum.
5. Use loyalty cards and apps
Remember to use your loyalty cards, to get instant savings or loyalty points, says Roets. It can make a big difference to the total amount you spend. It is handy to use store cards in app form so that you don’t carry a wallet full of cards with you.
6. Group trips together
Plan your travel to and from work, and to all other destinations. De Kock says you should group trips together: pick the kids up from school, do the groceries and visit the doctor all in one trip as opposed to three. Also, carpooling will save you money and wear and tear on your vehicle.
Also, drive your vehicle as long as possible, says Fenwick. "A car is not an investment, it is a consumable, buy what is practical and affordable, avoid the bling!"
7. Get a better insurance deal
Don’t review your insurance policy once a year – do it every six months, says Haldane. Enquire and look for better rates with different companies. Ask for quotes to get a better idea of what you’re being offered.
Also, make sure your short-term policy and vehicle insurance only cover the current value of your vehicle and that you are not over-insured, says De Kock.
Apply the same principle to your risk cover (life cover, income protection etc.)
"While you certainly do not want to skimp on cover, ensure that you are not over-insured. Your financial circumstances may have changed/improved from your original situation that necessitated a specific level of risk cover. However, make sure that you understand your position before you reduce your premiums."
8. Do it yourself
It’s shocking to see how much money we spend on things we could do ourselves, says Haldane. If you don’t have the right tools or materials, try borrowing from your neighbour or friend before heading to the store and spending unnecessarily.
9. Buy off-season
Products are usually cheaper when it is sold during the off-season, says Haldane. "For example, if you need outdoor winter gear, purchase it at the end of spring or in summer. If summer is approaching and you’re in need of swimwear, purchase it in winter or the beginning of spring."
10. Cook multiple days' meals at the same time
Cook three days' meals at the same time, is Fenwick's advice. This saves electricity and food costs due to less wastage.
11. Set a price limit on gifts
Don't overspend on gifts - rather reach an agreement with everyone on a budget for birthday and Christmas gifts. Also, "Secret Santa" arrangements - where only one gift within a budget is bought, instead on 15 - makes a lot of sense.
12. Sort out your debt
This is crucial. "Those monthly debt payments are one of the biggest challenges when it comes to saving as it robs you of your income. So, to get rid of your debt, try using the debt snowball method where you pay off your debts in a specific order- from the smallest amounts to the largest amounts," says Haldane. "It might sound impossible at first, but once your debt is all paid up, you can move forward and focus on your saving goals."
Also, try to re-negotiate your interest rate or check with other banks for a better deal, says Fenwick.
And do not incur more debt to maintain your lifestyle, says De Kock. "It will haunt you in the future. With the increasing interest rate cycle we are experiencing, taking on more debt is like putting a sticker over the warning light on your car's dashboard. Yes, you might not see the problem for a short while, but the issue is still there - and over time it will continue to worsen until you cannot ignore it anymore."
13. Budget, carefully
Perhaps the most important: keep to a strict budget.
Fenwick's advice is to draw up a budget by splitting your expenses between "must haves" and "wants",
Under "must haves", include everyday needs like food, medical aid, vehicle payment, insurance, retirement provision, schooling costs, water and electricity.
Investigate each of these expenses and see how and if money can be saved on each expense.
Under "wants", include entertainment, eating out and fast food, holidays, alcohol, clothes and gifts.
"This is often the space where people spend more money than they realise," says Fenwick. Cutting down on alcohol use and stopping smoking will save a lot of money, for example.
He advises that you take your last three months' bank statements and list every expense. Categorise expenses to understand where your money is allocated every month. "You will be surprised how much is spent on unnecessary and avoidable expenses."
Haldane recommends a "50/30/20 budget" where 50% of your income is allocated to necessities ("must haves"), 30% is devoted to "wants" and 20% to savings and other debt payments. "If by any chance, you exceed one of your allocations, try making some adjustments elsewhere."
14. Track all your expenses
In order to save money, you need to know how much you spend, says Haldane. Keep track of all expenses whether it be spending on food, monthly payments or household items. Go through your bank statements to ensure that you’ve included everything. Make sure to keep receipts as well.
Your money-saving questions answered
Have a specific question on how to save money? Ask us here, and we'll try to help you.
Question: I live in Cape Town and travel daily from Rondebosch to the city. What is my cheapest option? (Compare bus, taxi, uber, and car)
Answer: Commuters in the city have access to a variety of public transportation, including e-hailing services, trains, taxis, and buses.
They told News24 that convenience and finances are usually the main factors that influence the mode of transportation.
Commuters who take the Metrorail train to travel between the city centre and Rondebosch pay R8 for a single trip, which makes it the cheapest way to get around.
The MyCiti Bus is the next cheapest option. On peak morning and afternoon hours, commuters pay R17,90 and R14,10 off-peak when travelling within a 10-20km radius.
Taxis cost R20 per single trip and between R70- R90 for a round trip using an Uber. Prices for e-hailing services differ during on and off-peak hours.
If using your own car for the maximum 10km drive, you could claim around R41,80 if using the AA rate (which covers fuel and the costs associated with keeping your car on the road).
Question: What items are best to purchase in cash or on credit?
Senior economist at Econometrix Jeffery Dinham cautions against distress borrowing, which uses credit for day-to-day needs like clothing and food.
He advises using credit for investment and wealth-building purposes, like buying properties and paying for education.
"If you buy a TV, you are spending that money. You may resell it in the future, but that would be at a lower rate. You are not building any new wealth out of that money. You are just consuming it. Some people have to borrow for that, which means they would earn less in the future because they would repay that debt."
Question: I work in Sandton but live in Soweto. Am I saving money renting in Soweto and commuting, rather than living in Sandton and surrounding areas?
Answer: It depends on what your housing needs are and how much your transport costs.
Seeff real estate agent Mothobi Mothopeng says the demand for rental units in Soweto is rising among young professionals in their late 20s to early 30s.
He said they work in the city, Roodepoort, Randburg, Sandton, and surrounding areas. Mothopeng says they're deliberate about renting in Soweto because the township has "everything" and rent is more affordable than most suburbs.
Demand is highest in Diepkloof and Pimville because these areas are not far from the N1 highway, and travel time to the city centre and Sandton isn't significant.
The average rental for bachelor apartments is R2,000. He said these rentals are appealing to most young professionals. The average for bigger rentals costs R4,000. Tenants can pay up to R7,000 for a three-bedroom house in Diepkloof. Prices are higher in this area compared to other areas further from town.
Tenants in the township still need to take into account the cost of driving or commuting to work.
Seeff real estate agent in Sandton Rochelle Holand says young professionals who rent in the suburb work for local corporates and prefer to live closer to work.
Two-bedroom townhouses are popular among tenants, with the standard two-bedroom apartment going for R8,000. Tenants can pay up to R12,000 or more depending on their needs
Alfonso Nqunjana/ News24
Alfonso Nqunjana/ News24
How charities are thriving despite tough times
Helping hands, love, and donations – this is how Johannesburg non-profit organisations Miracle Mission and Swaragano soup kitchen are thriving and helping their communities amid the rising cost of living.
Are you a Household Hero? Do you have expert tips on how to make your money go further each month? Share your story with us, and you could win R5 000!
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