Navigating the Cost-of-Living Crisis in South Africa, 2023

cost-of-living crisis

The cost-of-living crisis in South Africa in 2023 is being felt by everyone. Navigating rising costs takes a mix of belt tightening and proactive strategies.

At the start of the second quarter of 2023, flour cost 29.9% more than it did 12 months ago. The price of onions rose by more than 50%.

What is a cost-of-living crisis

A cost-of-living crisis is when the prices of everyday essentials, like food, fuel and electricity, rise faster than household income.

Inflation is out of control and, commonly, monthly budgets are depleted within two or three weeks.

How much has the cost of living gone up in South Africa in 2023?

According to the latest figures released by the South African Reserve Bank, food prices have skyrocketed by 10.3%. That’s on the back of a dismal first quarter, when food inflation surged to a record 14-year high.

The cost of fuel is marginally down. A litre of 95 unleaded in inland areas is currently priced at R22.46, compared to R26.70 a year ago. That’s a significant increase from May 2020 when a litre cost just R12.02.

Despite sustained interruptions to the power supply, the cost of electricity was hiked by 18.49% from July 1.

Over the same period, wages stagnated or, in some cases, dropped.

Cost of living vs. salaries in South Africa

According to Numbeo, the estimated cost of living for a family of four in South Africa is a little over R35,000 per month. A single person needs around R10,000 a month just to survive. One of the most expensive outlays, rental rates, are excluded from these estimates.

In contrast, the average South African salary in 2023 is R26,000 a month. Families are experiencing a funding gap that’s almost impossible to breach.

When it comes to low-income earners, the situation is more alarming. The cost of basic foodstuffs, represented by 44 items, has risen to R5,023,95. That’s almost 26% higher than the minimum monthly wage.

Strategies for navigating the cost-of-living crisis

With interest rates at record highs, it’s essential to avoid getting deeper into debt. A better option is to find ways to cut back or supplement your income.

Consider a side hustle

Renting out a spare room, moonlighting as an Uber driver or selling homemade goods over the weekend can bring in a few extra rands.

Share costs and resources

Combining resources can significantly reduce costs. Sharing a living space, setting up a lift club and buying food in bulk with family and friends can help alleviate the strain on the wallet.

Make surplus income work harder for you

It makes sense to prioritise paying off debt. Typically, it saves more money in the long run than you would earn through an investment.

That said, it’s still important to create a slush fund for life’s emergencies. For any savings, it’s important to seek out the best low-risk returns and to capitalise on the only advantage of soaring inflation – higher interest rates on deposits.

Cut back

Most tips for cutting costs are obvious to price-conscious South Africans. However, it may still be worth tightening up spending in certain areas, like insurance costs, internet costs and fast food.

Relocate if necessary

Homeowners with bonds are facing exorbitant home-loan repayments and renters in central locations are experiencing high rents. When basic living costs pass a certain stress level, it can make financial sense to relocate.

Focus on what you can control

There are factors you can’t control in life. Inflation is one of them. Aim to control what you can and let go of the rest.

How Pawn My Car can help

If you’re navigating the cost-of-living crisis in South Africa, you can always exploit the value of your second car. Pawn My Car offers short-term loans against paid-up vehicles – no credit checks or income statements required.

Our asset loans use the vehicle as collateral, so they’re available to anyone with a paid-off car regardless of credit score or employment status.

Once you pay off the loan and interest, the car is returned to you.

We’re a registered credit provider, and our interest rates are fully compliant with NCR regulations.

Call us on 0861 112 866 or WhatsApp us for more information. You can also apply online now.

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Repayment Period

3 months

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