Read more
I think we are in for a roller-coaster ride this year
Most of us have interest-bearing debt – home loan bonds, car debt, study loans, overdrafts…
Picture: iStock
The year has just started, and I’m not as keen on the new year as I was some weeks ago. With threatened interest rates increases, I’m not so invested in this year any more.
We need a few basic things to survive. Health, food and love … that’s about it. And I’m not so sure we can afford those things any more. Love, I agree, costs nothing, but food is unaffordable.
As is healthcare. I am prone to unexpected headaches and I usually carry a few painkilling powders with me, which I think qualifies me to comment on the increase in prices over the past years. It’s shocking! Look, interest rate hikes aren’t necessarily a bad thing.
ALSO READ: Fuel price woes: February increase will be bigger than expected
They can limit inflation and increase the income of rich old people with investments (which doesn’t include me – I’m old, but certainly not well-off.) It usually makes a lot of sense to cut interest rates when the economy slows down, as we saw during the Covid pandemic, and then to increase them when the economy is in a growth phase.
But at this time, it is bad news for the average South African, who is cash-strapped and battling to make ends meet.
The JSE is setting new records, but this seems to be despite the economy, rather than because of it. Unemployment is high, inflation is rife and the average family finds it a struggle to make ends meet.
Most of us have interest-bearing debt – home loan bonds, car debt, study loans, overdrafts… A 50-basis point increase can easily mean an extra R1 000 per month to the banks and my little dysfunctional family can certainly not afford it.
ALSO READ: More suffering for South Africans as interest rates hiked again
If some of my readers believe journalists live in mansions, drive luxury sports cars and sniff expensive designer drugs off the naked flat tummies of ramp models … sorry. Like many other South Africans, I live in a humble sectional title unit, I drive a decade old delivery van and the closest I’ll ever come to designer drugs is that occasional headache powder.
At least the lovely Snapdragon is quite the looker. Tonight, on my way home, I’m stopping for a Lotto ticket. That’s my version of responsible financial planning and I’m sticking to it. Finish and klaar.
I think we are in for a roller-coaster ride this year. Buckle up
NOW READ: South Africans’ take-home pay in 2022 down by almost 5%
