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The Mini Budget and You – What it Means

Budgeting • by Paul de Beyer • 18 October 2019
Ah, budgeting. Your favourite, right? The funny thing is, budgeting is just something that happens to keep your household afloat. It happens across all facets of life and the budget that Finance Minister, Tito Mboweni, will present at the end of October could affect you just as much as your own budget does.

So what is a mid-term budget? To put it simply: it's the government reviewing the finances of the country, setting out priorities for the next three years and making emergency changes where they feel necessary.

While that might sound a bit unnecessary, it's a principle we should all apply to our lives. A mini budget should be something we all do at different points in the year. The bottom line is that, like the country, our expenses and circumstances have changed from when we set out our original budget back at the start of the year. Reviewing our expenses is something we should all be doing!

What should we expect from Finance Minister Mboweni’s mini budget?

  • Expect him to point out that, despite the various tax hikes, including the recent VAT increase, the growth of the economy has been poor to date.
  • The overall growth outlook is below 2% and unlikely to change over the next two years.
  • An explanation of where the government has found that it has money shortfalls and where they will be reallocating funds.
  • A proposal for accelerating growth which should include the sell-off of state-owned companies.

While the government might be working in billions of rands, the ideas are universal:

  • Review your own expenses, debts and debit orders.
  • Compare your current payments such as home insurance, funeral policy, car insurance and cellphone, etc. and see if you’re getting the best deal.
  • Go a step further and review your bank fees. You could potentially save a few hundred rand a month by simply switching banks for free!
  • Reallocate funds where you can to pay off some debts quicker than others, especially if they have a higher interest rate.
  • Work on ways to reduce expenditure and ultimately try to set aside some money for growth in the future through a retirement annuity, pension/provident fund or tax-free savings account.

How can the SA mini budget directly affect you?

Unless you’re an employee of a stated-owned company, there'll be very little direct influence on your life. The continued evidence of poor growth is an indicator that further tax increases are very likely in the full budget next February, which could cause a strain on your finances during the early part of the year.

This potential increase is another major reason to conduct your own mini budget and really understand how your money is working for you. If you need help figuring out how to budget, simply sign up as a Creditgenie member. Not only do all Creditgenie members gain access to the Financial Wellness Programme, but you’ll also gain access to a certified financial expert to help you understand your finances, how to budget and, ultimately, get yourself set for the future.

Click here to sign up now!