South Africa’s major cities are forecasting major increases in utility costs for their residents. This set to start on the 1st of July 2024, according to the draft proposals for the 2024/25 financial year for their respective municipalities. Various services, such as property rates, electricity, and water will experience fee increases. In addition, Municipal mayors have clarified that tariff hikes are necessary due to above-inflation Eskom, water board, and salary increases.

Among the major metros, residents of eThekwini Metropolitan Municipality will face the highest increases, potentially impacting their finances significantly. This may result in increased financial strain for many people, especially those already dealing with debt. As a result, many will find it even more difficult to make ends meet due to the higher cost of living. 

As a result, these proposed tariff hikes raise concerns and frustrations among residents who are grappling with severe service delivery challenges. While electricity price hikes align with Eskom’s 12.72% increase approved by Nersa, Nelson Mandela Bay and eThekwini have proposed substantial increases compared to there counterparts. Johannesburg and Cape Town have managed to slightly protect their residents from these hikes. 

Let’s look at some practical strategies to help you navigate the proposed increases in utility costs while managing your debt effectively:

Review Your Budget

Before the forecasted increases in utility costs in our major cities, it is crucial to carefully assess your budget. Examine your spending to identify areas where you can make changes, specifically by cutting down on unnecessary expenses to focus on essential needs like housing and utilities. Set realistic spending targets and regularly track your progress to ensure you are sticking to your plan. Explore opportunities to reduce costs on essential expenses and be open to adjusting your budget as needed.   By taking a proactive approach to budgeting, you can prepare for the upcoming rate hikes and safeguard your financial stability in times of economic uncertainty. 

Explore Government Assistance

Explore the government assistance initiatives available to individuals facing financial hardship. In South Africa, these are called indigent households. These are households that earn below a certain monthly salary and will receive services – such as water and electricity – for free or at substantially subsidised rates. This includes pensioners, the unemployed, child-headed families, and students. This financial assistance can help offset the impact of rising utility costs on your budget.

Households need to sign up with their local municipality to be eligible, and authorities are responsible for reviewing each application. Approving only those households that fulfill specific requirements. Indigent status is not permanent and can change as a family’s economic situation improves. Municipalities often ask registered households to reapply for indigent status annually to make sure that only the most needy families receive assistance.

Seek Debt Management Assistance

If a large portion of a household income is going towards high debt repayments, consider seeking professional debt management assistance from reputable companies like Vantage Debt Management. Our financial consultants can work with you to develop a personalised debt repayment plan tailored to your financial situation and goals. From negotiating with creditors to consolidating debts into more manageable payments, we’re here to help you regain control of your finances and achieve debt freedom.

By being proactive in handling your debt and managing your budget effectively, you can confidently face the upcoming rate increases and maintain financial stability.  It’s important to remember that you’re not the only one dealing with these challenges, and there are resources and assistance available to help you overcome them.  Whether it’s through debt management support, government initiatives, or community aid, there are various options to assist you in navigating through tough times and coming out stronger.