We recognise January is a challenging month, we've put together some suggestions on how to get through it financially sound. It is vital to understand how inflation affects your everyday life; hence, studying and comprehending the CPI will help you remain on top of rising expenses and inflation rates.
First and foremost;
Understanding the CPI-(Consumer price index) as we move into 2024
Everyone is affected by the CPI, so taking a few minutes to understand the inflation points in their key areas is essential.
The Consumers Price Index (CPI) tracks the rate of change in prices for household purchases of goods and services. In other words, prices are a good indicator of how much consumers are willing to pay for the goods they buy. The CPI can be used to compare current period consumer prices with those in the base period using a given starting point or base period, which is typically taken as 100. The most popular measure of inflation is the consumer price index, which monitors changes in the average consumer's cost of acquiring a set assortment of goods and services.
Consumer Price Index as a Whole (CPI for all urban areas)
According to Statistics South Africa November, 2022.
“In October 2022, annual consumer price inflation was 7.6%, up from 7.5% in September 2022. In October 2022, the consumer price index increased by 0.4% month on month.
Food and non-alcoholic beverages, housing and utilities, transportation, and miscellaneous goods and services were the main contributors to the annual inflation rate of 7.6%.
Food and non-alcoholic beverages increased by 12.0% year on year, contributing 2.1% to the total CPI annual rate of 7.6%.
Housing and utilities increased by 4.3% year on year and contributed 1.1%.
Transport increased by 17.1% year on year and contributed 2.4% of the total.
Miscellaneous goods and services increased by 4.8% year on year, accounting for 0.7% of total growth.
What's most important from the CPI?
- A 4% increase in food and drink prices will have a direct impact on spending plans and budgets.
- In South Africa, fuel changes are frequent, so it's important to keep a close eye on the price to avoid paying more than necessary.
It's reasonable to say that January's budget isn't the same as other months'; it's frequently more costly, and budgets are notoriously tough to stick to over the holidays. However, making modifications and arrangements in all areas to free up any available funds is usually a fantastic strategy to avoid the January hangover, as it is commonly referred to.
Here are our top tips on getting through January unscathed
- Cut all contracts you do not need
Car insurance, home insurance, and television contracts such as Netflix, Amazon Prime, and DSTV are examples. All contracts should be challenged if you believe they are unnecessary. Flexibility in the monthly service plans we choose is always better in the long run.
- Travel less and save on fuel
This is a difficult point to address because many of us rely on transportation to get around. This could include taxi fares, fuel for our personal vehicles, or train fares. Work is the most important aspect of travel, but all other trips should be challenged and planned to save money wherever possible. Another great way to save money is to carpool. Once January is out of the way, this may be reconsidered.
- Work from home if possible
Not everyone is fortunate enough to work from home, but if you have any days available, discussing with your employer the possibility of working from home more frequently, when possible, could be a great way to save fuel and time spent in traffic.
- Sell your unwanted items
- Offer a side hustle service
If you are staying at home during the holidays, many people are looking for house or pet sitters, and this could be a great way to start a side business, even if it is only for a month.
Looking for more ideas to start a Side Hustle, read our recent article here.
- Household items and utilities
Keeping an eye out for any bulk purchase specials is frequently a great way to save on household goods like cleaning supplies, food, and toiletries, which are frequently on the rise.
- Stay home for the win
Stay at home whenever possible and only spend money on outings that are on your budget and to-do list.
- Consider Second-hand
If you are a guardian or parent of a student, think about shopping at the school's donation store. When it comes to kicking off the New Year, buying used may often be a great way to save money.
- Save now for your December budget
Our Financial Guide to Surviving the 2023 Holiday Season is provided here to help you get off to a strong financial start in January. This comprehensive guide will help you begin saving for 2023 and includes our 52-week savings plan and budget template, both of which can be downloaded easily. All of this can help you organise your finances and increase your financial literacy in preparation for a fantastic December.
January can be a difficult month that causes unnecessary stress; it's always a good idea to start saving wherever possible. One of the most difficult, but also most effective, ways to stay ahead of monthly financial obligations is to free up any extra income. Monitor inflation therefore, is now more important than ever, in order to stay ahead of your monthly budget and rising costs.