Time to reassess your spending

DESPITE the rand’s relative strength right now, the economy will remain under severe pressure.

The only consolation perhaps is that we are in a lowering cycle for interest rates.

But that’s hardly going to make a difference if you’re struggling to get it together financially.

Now is a good time to take a scalpel and a discerning eye to your budget and cut out unnecessary spending. Be honest about the things that you need versus what you want. We all have things we can definitely live without but prefer to keep paying for anyway.

It might mean forgoing the upgrade on your cellphone, cancelling your satellite TV subscription or cutting down on entertainment and eating out. For others, the decision could be as big as finding a cheaper place to live.

You also want to trim your debt. Focus on the short-term, high-interest debt because that’s the most expensive kind of debt.

If you’re drowning in debt, speak to your creditors now and negotiate a more manageable repayment plan.

If you have medium- or long-term debt such as car or house payments, then try by all means to pay a little more towards those.

An extra R300 a month could make a huge difference in terms of reducing the repayment period.

If you’re worried about your portfolio, now is probably the best time to look at offshore invest

Usually, we panic about offshore investing when the rand is in a downward spiral – and that’s probably the most expensive time to pick up offshore assets.

However, with a strong rand, you get more bang for your buck, so shopping around for rand-hedge stocks or exchange-traded funds to add to your portfolio is a great idea.

With the outlook on South Africa’s economy being so bleak, it is unlikely that sectors in the local economy will do particularly well.

Unfortunately, when it comes to issues like weak economic growth, the light at the end of the tunnel can take a while to reach if the right policies aren’t implemented to turn the situation around. It’ll probably get worse before it gets better.

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