A Consumer Outlook of the Sa Budget | Legacy BlueStar | Sanlam Financial Planners Bellville, Cape Town

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A consumer outlook of the SA budget

Take a look in the mirror and budget speech yourself!

South African Finance Minister, Enoch Godongwana, delivered his annual budget on 21 February, determinedly working to decrease government borrowing, while aiming to bridge the gap between revenue and expenses.

For many South Africans, this narrative is all too familiar. Farzana Botha, Segment Solutions Manager at Sanlam Risk and Savings, encourages us to see the National Budget Speech as an opportunity to have frank financial conversations with ourselves and commit to moving closer to our financial goals.

The past year was economically challenging, with an estimated real GDP growth of just 0.6%, the highest levels of load shedding on record, weak commodity prices, infrastructure issues and high levels of fiscal deficit.

“South Africans felt the pressure, with high inflation and the increased cost of living causing financial stress,” says Farzana. “This year, despite no increase in tax rates and the fuel levy, no inflationary relief has been proposed for taxpayers, which means we will all continue to feel that pinch on our pockets. Now is the time for people to Budget Speech themselves and find smart ways to make their money work harder.”

Listen to Farzana’s key take-outs below:

Additional tips Farzana shared

Tips for your personal budget speech

1. Small steps add up: Celebrate the small wins and habits in moving your financial future forward. The Minister has had to make many difficult trade-offs, but we’re also seeing positive steps, such as the stabilisation of inflation. Double down on your positive money habits; incremental movements in the right direction all add up.

2. Maximising every opportunity: Much of the Minister’s conversation centred on taxes – including not adjusting personal income tax brackets, rebates and medical tax credit for inflation and explaining how taxes are used to benefit the nation. Consider how you leveraged your tax deductions and annual returns. Did you maximise these opportunities to create more disposable income, through investments, for example? Are you making the most of annual allowances for tax-free savings accounts and retirement fund contributions or can you do more this year?

3. Take responsibility: Debt and addressing unnecessary expenditure was a dominant theme in the Budget Speech – a pertinent topic for many people personally. DebtBusters recently revealed that the average South African consumer spends about 62% of their paycheque servicing their debt. If you’re struggling with debt, having a plan is pivotal. Consider accessing Sanlam’s free credit coaches to help you pay down debt, instil positive habits and improve your credit score.

4. Be honest with yourself and others: Be the finance minister of your own life. When you Budget Speech yourself, be honest and get granular. The only way this exercise will make a meaningful difference is if you are completely transparent. Reflect on the behaviours that are serving you; plan to let go of the ones that are not. Revise your budget, prioritise spending and be accountable to others. Having honest conversations with loved ones can be incredibly empowering. If you share your financial reality, they can help you self-reflect, plan for the future and keep you on track.

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