1Build a buffer into your budget. When interest rates increase, it affects your debt repayments. You can expect debt such as your home loan, vehicle finance, personal loans and credit cards to increase. It makes sense to go through your budget now and identify areas where you can reduce your spending so that you are able to deal with interest rate increases.
2Pay off your debt as quickly as possible. Prioritise your debts and try to pay off the higher interest-bearing debts, such as credit and store cards, as quickly as possible. If you find that the rate increase or future increases down the line affect your ability to meet your debt repayments, contact your creditor and make alternative payment arrangements. Most importantly, try not to incur more debt when you have succeeded in paying your current debts off.
3Get smart with household bills. Your daily shopping is where you are likely to feel the effects of inflation the most. Compare the prices of different products instead of sticking to one brand. When you are making comparisons, take into account the weight and size of the product you are buying, and not just the price. Remember that bigger is not always better. For example, buying two packs of nine toilet rolls might be cheaper than buying one pack of 18 toilet rolls.
4Save salary increases. When you receive a salary increase each year, it is usually linked to inflation, which means you are not really receiving more money. Your increase may simply be enough to enable you to meet your increased expenses. The last thing you should do is take on more expenses or splurge on new purchases. Sit tight on the “extra” money you now have; you’re going to need it for existing costs. Set up an emergency fund. Have an emergency savings fund that you can dip into when the need arises. You can also use these funds when you are feeling the pinch of inflation. But make sure that you are able to replenish your emergency fund as soon as possible after you use it. Cut electricity costs. Cut down on electricity costs by implementing savings measures such as using energy-efficient light bulbs, installing a solar heating system or using a timer on your geyser.
Cut fuel costs.