PODCAST | Households’ guide to financial resilience post-MTBPS

The effect  of the recent medium-term budget policy statement on ordinary South Africans is the focus of this edition of Business Day Spotlight. 

Host Mudiwa Gavaza is joined by Bertie Nel, head of financial planning and advice at Momentum. 

Nel says understanding this year’s MTBPS is crucial to managing household finances effectively.

“The MTBPS is a significant economic announcement that outlines the government’s fiscal strategy and sets the scene for the annual budget in February” he says. “It provides essential insights into inflation targets, tax policies, social grant updates, and economic growth projections, all of which impact household finances in real terms.”

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With a number of competing economic issues to deal with such as inflation, taxes, interest rates and GDP, Nel says finance minister Enoch Godongwana was able to strike a good balance with the recent mid term budget. 

Although the Treasury forecasts a stable inflation rate of 4.5% over the medium term, Nel highlights that households must still plan for cost-of-living fluctuations. This starts with adjusting budgets and setting up emergency funds to cushion against unexpected expenses, he says. 

The financial planning expert also outlines the pressure that many consumers are under to make ends meet. Recent data showing larger-than-expected withdrawals from retirement funds following the recent implement of the two-pot system. This shows just how much consumers are looking for means to plug current budgetary holes, at the expense of future investment gains. 

Through the discussion, Nel underscores the importance of understanding the MTBPS for effective household financial planning; ongoing consumer pressure in the country; the effect of rising living costs and borrowing costs on decision making; and the importance of financial advice. 

“As we approach the year’s end, families have an opportunity to build stronger financial foundations. By understanding economic realities and how to respond to them, we can all make better financial decisions,” he says. 

Business Day Spotlight is a MultimediaLIVE Production. 

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