Time to review your financial resolutions

Channel Head at FNB Financial Advisory, Ester Ochse

According to a recent article in the Sunday Times, South Africans are being forced to eat cheaper food.

The Pietermaritzburg Agency for Community Social Action (Pacsa) was quoted as saying that in January a food basket of starchy foods, sugar, beans, oil, milk, meat, fish and vegetables cost R1797. In March, according to Pacsa, it cost R1869.

Some foods tracked by Pacsa between November and March showed a sharp increase: 10kg of potatoes rose from R35 to R60.32, four litres of cooking oil from R70.66 to R89.98 and 10kg of sugar from R103.65 to R117.98.

The petrol price is a shocker at the moment, interest rates will still go up this year.  All these factors indicate that we should be reviewing our financial resolutions.  Channel Head at FNB Financial Advisory, Ester Ochse has some advice.

The steep increase in the cost of living should prompt consumers to review their financial resolutions. In the first quarter of this year, consumers had to deal with back-to-back interest rates increases, which were quickly followed by electricity and fuels price hikes.

To add to the financial pressure, food prices are expected to continue rising for the remainder of this year and further rate hikes have not been ruled out.

Ochse says the sharp increase in the cost of living is likely to have caught many people by surprise. She says people who had set financial resolutions before the beginning of this year should reassess their financial position and adjust to the current conditions.

“At the moment, there’s no indication that consumers will get financial reprieve any time soon.  In fact, most financial indicators point to an even tougher outlook.

“People need to be realistic about the financial resolutions they can achieve during the course of this year. For instance, if you were looking to buy a new car using a linked interest rate, consider the fact that your instalments could go up once or twice before year end, and adjust your plans accordingly.”

Ochse provides important things to consider when reviewing your financial resolutions for this year:

• Separate ‘needs’ from ‘wants’ in your resolutions;
• Isolate short-term from long-term resolutions;
• Match your needs to available financial resources;
• Set a timeline to achieve each resolution;
• Keep track of your progress.

“It’s important to remember that reaching financial resolutions requires a lot of discipline. Once you’ve set yourself targets, try to avoid impulsive decisions that could delay the realisation of your resolutions. People need to be willing to sacrifice and compromise along the way,” she says.