The couch economist speaks….
Well I am not sure if you have done this yet, but one of your new years resolutions should have been to prepare your household budget. I sat down and drew up the budget and am scheduled to discuss this with my fantastic wife over the next day or so. As with every household we are going to be facing some interesting times over the next 6 to 12 months.
While we are by no means in dire straits we certainly are needing to watch the pennies to ensure that we keep ourselves out of the ever increasing debt trap. Obviously the further reduction in the petrol price is something to be happy about, but the real relief will come when we see the reduction effecting the food and other commodity prices. So let’s hope that the manufacturers start to pass these savings on and that the retailers in turn also pass these on.
A quick sum shows that the decrease in the fuel price of around R 4,50 a litre, since it’s peak of over R 10,00, on an average tank size of 50 litres equates to a saving of R 225.00 per fill-up. If you fill your tank between 3 and 4 times a month, then you are saving between R 675.00 and R 900.00 per month.
I would urge you to try and channel this saving away from you spending and putting into reducing your debt levels. I know that some of you will be saying that you need the money to survive, but if you have been able to “survive” without it thus far, then you should still be able to do so. Channeling this amount into reducing your debt will have a profound effect on your future.
On a bond of R 750 000.00 this would translate into a reduction in your term from 20 years to 15 years bringing about a saving of around R 446000.00 over this period. I think that anyone would agree that this would be fantastic.
So once again I urge you all to work towards getting rid of the debt millstone and working towards operating within your financial means.