Personal finances in a recession

In Latest, Money cents by Donna Willan

Personal finances in a recession

Two weeks ago, I said I would reflect on how tight my personal finances were becoming, then last week we officially tumbled into a recession. So, I wasn’t imagining it – inflation is hitting hard where it hurts. Simon was also lamenting it on Monday, it’s on all our lips.

Right. We are in a recession, we do not have enough money. It’s time to commit to an austerity plan to get through this.

So here is my five-point plan to cope with the recession:

  1. Holidays: they are for the good times. During a recession, we have fewer and we go cheaper. Rethink any holiday plans and see where you can cut back – a lot; these are often big spenders!
  2. Food: I’m going to say it again, gourmet food, Woolies, delis, they are expensive, so cut back. Shop at cheaper supermarkets, buy in bulk, buy less gourmet, get that extra yummy flavour through cooking delicious food yourself. Hey, maybe the silver lining of the recession is that we all improve our cooking skills!
  3. Presents: spend less, buy fewer – seriously no one needs big flashy presents, they want presents that are thoughtful. It may take more thought and time to find a smaller, cheaper thoughtful present, but it saves money – and that needs to be our focus during a recession.
  4. Petrol: reducing petrol consumption is hard I know, but necessary right now. So, lift clubs are great (for school runs, getting to office jobs, etc.), use the Gautrain, Uber can be cheaper if there are a couple of you, and if you are buying a new car seriously think about going smaller – the petrol saving can be HUGE!
  5. No new debt: and I mean NO NEW DEBT! If you can’t pay cash don’t do it. A recession is not a time to be increasing debt – just don’t do it! (Luckily I contracted my deck two weeks ago otherwise I would be waiting a long time.)

Sorry folks, but I think that a recession is a serious call to action. Put all luxuries on hold and tighten the belt – this too will pass. But until it does, follow your austerity plan. I am going to try follow mine!

In my next column, I’m going to interrogate our household and car insurance – do we go with the cheapest, the best reputation, none at all? By the way, the deck is nearly done, and it’s beautiful!

Donna


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