Budgeting tips to help you manage the VAT increase
Taking a proactive approach to your finances is key. Here are some practical tips to help you prepare for the potential financial strain of the upcoming VAT increase.
The announcement of the VAT increase in the 2025 Budget Speech has left many South Africans feeling overwhelmed and uncertain about how they will manage their expenses.
While government leaders believe the proposed increases are necessary to keep the country financially stable, not everyone shares this view. However, shifting your perspective and taking a proactive approach can help you navigate the changes more effectively.
Here are five practical tips to adjust to the proposed budget changes:
1. Evaluate your spending habits
Review your monthly expenses and identify which items will be affected by the VAT increase. Focus on non-essentials that will now cost more and consider how you can adjust your spending to maintain financial stability.
2. Readjust your current budget
Buying in bulk can help you avoid the VAT hikes on certain grocery items. Additionally, focus on including more VAT-exempt groceries, like fresh produce, in your shopping.
You may also need to revisit your budget for utilities and services, as some of these may see VAT increases. Consider adjusting your budget for entertainment subscriptions and dining out to accommodate the new financial landscape.
PS View the VAT increase as a great opportunity to boost your intake of fruits and vegetables, making it a healthy choice for both your wallet and your body!
3. Savings is a must
We've highlighted the importance of creating an emergency fund, and now, more than ever, saving can help you manage rising costs with less stress. The VAT increase is a reminder of just how valuable an emergency fund can be when unexpected financial challenges arise.
4. Consider big purchases
While the VAT increase shouldn’t necessarily deter you from making a big purchase, it may be more cost-effective to make these purchases before the price hike takes effect. Timing your purchases strategically could save you money in the long run.
5. Look into side hustles
Consider exploring alternative income sources, such as side hustles or passive income opportunities. However, be cautious and do your research to avoid falling into scams. Always verify the legitimacy of any investment or earning opportunity before committing your money.
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