Plan your own budget

Finance Minister Pravin Gordhan announced the National Budget on 26 February, which stipulates the government’s income and its plans for spending the income.

It is a good idea not only to look at how the national budget with its additional taxes will affect your personal budget , but to use it to plan your personal budget. The main themes for consumers in the budget are savings and debt.

“These are two very important themes for everyone,” says Eunice Sibiya, Head of Consumer Education at First National Bank.

In order to encourage savings, there will be provision for tax exempt savings accounts.

“Without savings you won’t have a buffer to help you in emergencies or for your future,” says Sibiya.

“If you haven’t got any savings, start right now, and if you have started saving, look where you need to bolster it.”

The government itself is focusing on reducing wasteful expenditure.

“Take a hard look at your own budget and identify where you can cut down on your own wasteful or unnecessary spending,” says Sibiya.

“This can be allocated towards paying down your debt and towards saving, instead of instant gratification on entertainment or the latest clothing.”

There are a few areas where the national budget will have a direct impact on your own spending, which you need to take note of, says Sibiya.

In April petrol will go up a further 20 cents owing to additional taxes.

“This along with recent petrol hikes will make petrol very expensive,” says Sibiya.

“This means that you will need to allocate more of your budget to transport, whether it is for your own car or public transport.”

Another item that may affect your pocket is the tax increase on alcohol and cigarettes.

There is some good news though.

“If you earn R250 000 or below a year, you will be getting a tax break, which means that you will be paying less income tax and have a larger disposable income,” says Sibiya.

“But put this away into savings or pay back your debt rather than think that you suddenly have a bit more money to spend.”

Every South African, not just the government, needs to watch their spending, start paying back their debt and start saving. Monthly budgeting and financial discipline will help you manage your finances better.