At the start of September, it was announced that South Africa’s economy has slipped into a technical recession. With living costs rising, students are feeling the financial pinch more than ever. If you’re struggling to cope with the pressure of funding your studies and monthly expenses, then read this guide for helping you through the recession.
South Africa’s recession
A recession happens when the Gross Domestic Product (GDP) of a country experiences a negative growth rate in two consecutive quarters of a year. South Africa’s GDP fell by 2.6% in the first quarter of 2018, and by a further 0.7% in the second quarter, meaning that the economy is in a technical recession.
This is bad news for consumers, who are having to deal with rising fuel prices, higher inflation, and VAT increases. Together with the high rand-dollar exchange rate, South Africans will be paying more for most goods and services than they were before the recession.
Tips for helping you through the recession
If you’re a student, then you (as a low-income earner) are especially affected by the decline in our economy. At the same time, it becomes even more important for you to complete your studies, so that you can find a secure career that cushions you from the impacts of difficult economic times. Here are some things you can consider doing to stay financially healthy:
1. Find new ways to reduce spending
Although this may sound obvious, it’s important to realise that there are literally hundreds of ways to reduce your spending. From choosing to buy clothes from value-for-money stores, to cutting down on fast food, reducing your electricity usage or choosing a cheaper cellphone contract when it’s time for you to renew. If you cut down on a few non-essential expenses per month, then you can save money without experiencing a noticeable change in your current quality of life.
2. Budget properly
Every financial expert will tell you that budgeting is at the heart of sound financial management. In tough times, it becomes even more important to create a proper budget and stick to it. Budgeting allows you to set aside the money you need for essentials such as rent, groceries, transport costs and study fees. It also gives you the opportunity to find areas where you can possibly cut down your costs.
3. Find part-time work
If you’re studying via distance learning, then you’ll have the opportunity to balance your studies with part-time work. Think about the skills that you currently possess, and whether you could use them to create products to sell or offer services to small businesses. Alternatively, see what part-time jobs are available in your area. On job sites such as Indeed and Adzuna, you’ll often find a variety of part-time positions, from waiters to cashiers, sales assistants and even film extras.
Discover 5 Businesses You Can Start While Studying
4. Split costs with friends
See where you can share expenses with your friends – they won’t say no to saving an extra buck or two! When you need to travel somewhere, for instance, carpooling or splitting the costs of an Uber ride can cut your transport costs by more than half. There are various other creative ways to share expenses. You could, for example, cut down on your internet costs by sharing the monthly contract fee for a WiFi router that you and your friend can take turns using every month.
5. Make wise decisions
This is not the time to make impulsive purchases or new financial commitments. Don’t be tempted into taking out an expensive contract on the latest new phone or buying that pair of extravagant brand-name shoes. Your ability to get through tough economic times will depend on you making wise, well-thought out decisions about anything that will affect your finances.
By using these tips, your wallet will be able to withstand the effects of the recession, and you’ll be ready to prosper when the economy recovers!
- FIND OUT HOW SUCCESSFUL PEOPLE MANAGE THEIR FINANCES
- FINANCIAL PLANNING TIPS FOR RECENT COLLEGE GRADUATES