CONSUMER TIPS AHEAD OF THE 2018 NATIONAL BUDGET

CAPE TOWN - With the 2018 National Budget Speech set for this Wednesday the 21st, analysts have been sharing on what they think the budget will be mostly about.

Judging from what economical experts have been saying, there is a huge possibility of tax increase on a number of products.
One possible outcome of the budget is the introduction of Value Added Tax(VAT). which if introduced will see us having it for the first time since 1993. According to Priya Naicker, advice manager at Old Mutual, tax hikes usually affect consumer budgets and expenditure therefore consumers need to plan and budget accordingly for changes  that might arise. Naicker highlights some of the ways in which consumers can prepare for these changes.

• Review and understand interest rates on your debt

According to Naicker, while it may be tempting to purchase on credit, consumers need to consider purchases carefully against the total repayment cost. Consumers need to create a plan to reduce debt and not accumulate it. 

• Review luxury and discretionary spending

"With the introduction of VAT an option, the Treasury might increase VAT on premium items and services like cigarettes and alcohol" says Naicker.

Cutting expenses on these items could provide financial relief.

• Create a financial plan

"A financial plan helps you develop strategies to balance needs in the short, medium as well as long term goals. Combining attention to what you want to achieve with an understanding of your finances and taking action is key to financial wellness." says Naicker. She also added that "A financial adviser often brings the expertise needed to interpret economic factors within the context of individual circumstances to help create a dynamic plan that is adaptable to changing circumstances."

• Save and keep saving

Saving has been and will always be a great way to minimize expenses. Naicker urges consumers to continue cultivating the habit of saving and spending less.