Build a plan that stands up to inflation
By Suzean Haumann *
South African consumers are no strangers to high inflation. Readers of a certain age will remember far higher inflation in the ‘70s, 80’s and ‘90s that was consistently in double figures, peaking around 18% in 1986. So, inflation at today’s level of 2.3% (March 2025) hardly seems the most pressing issue for local investors to worry about.
However, there are real fears that inflation could rise again – especially with all the global uncertainty and trade risks. This is why the SA Reserve Bank has been reluctant to cut interest rates too quickly, leaving households hanging for some budget relief like drivers stuck in trtaffic jams during load-shedding.
What’s important to note about inflation is that it’s not just about rising prices at the till, but also the impact on your investment growth.
What inflation does to your spending and investments
Inflation is the steady increase in the cost of goods and services. When inflation rises, your money buys less – petrol, groceries, school fees and electricity all become more expensive.
But inflation also has a less visible effect: it reduces the value of your investment returns.
Even if your portfolio grows, rising inflation means you may not actually be making progress in real terms.
For example, if your investments return 8% a year, but inflation is 6%, your real return is only 2%. That 2% needs to be enough to fund your future goals – from your children’s education to your retirement.
No one can say for sure where inflation is going. What you can do is make sure your financial plan is strong enough to handle whatever comes next.
How changing your behaviour can help you beat inflation
Think of your financial life like building a house. You don’t lay bricks without a plan. You start with a blueprint, use solid materials, and protect it against future storms. That same approach helps you stay ahead of rising prices.
Here’s how to build a financial structure that can weather inflation:
Set a budget that supports your goals
Your budget is your blueprint. It tells your money where to go – and helps you stay in control. Don’t aim for perfect. Start simple: track your income and expenses for one month, using a free app or spreadsheet.
Make the smart choice the easy one by automating your budget or using pre-set categories.
Top tip: Use a digital budget with reminders, or pick a tool that shows you how much goes to needs, wants and savings.
Prioritise what matters most
Inflation forces tough choices. That doesn’t mean cutting out everything fun – it just means being more deliberate.
One simple habit: before spending on anything non-essential, give yourself 24 hours to think it through.
Automate your savings with debit orders
Set your financial plan on autopilot. By moving money into a savings or investment account automatically just after payday, you make saving the default. You never see it, so you don’t miss it.
Top tip: I find it helps to rename your savings accounts with emotional goals like “Holiday 2026” or “Home deposit”. You’re more likely to stick to savings when the outcome feels personal.
Build an emergency fund
A good house has a backup plan, and so should your finances. An emergency fund gives you breathing room when life throws something unexpected at you.
Instead of aiming for three months' salary all at once, focus on small, achievable milestones: first R1,000, then a week’s expenses, then a month.
Review your financial plan every year
Just like a house needs annual maintenance, your finances need regular check-ins. Your income, expenses and goals change. Set an annual reminder to review your plan, and if possible, do it with a financial adviser who can give you honest feedback.
Top tip: Tie your review to a fixed date (e.g. your birthday or tax season) and put it in your calendar. That one step dramatically increases follow-through.
Don’t let comparison drive your decisions
It’s easy to feel like you’re falling behind when others post holiday pics or drive newer cars. But that’s not a sign of financial success, that’s just what’s visible. What you don’t see is their debt, stress or long-term risk.
It’s far better to shift your focus to invisible wins. Celebrate milestones like “credit card paid off” or “saved for school fees.” Real financial freedom often happens quietly.
Take control before inflation does
Inflation may feel less urgent today, but it’s not going away. By building a strong financial foundation now, you’ll be better prepared for whatever the economy throws your way.
Start with a clear plan, build consistent habits, and review your progress each year. And if you’re unsure whether your investments are keeping up, speak to a trusted financial adviser who understands your goals – and the South African realities we all live with.
* Suzean Haumann is a Certified Financial Planner® professional and head of Brenthurst Wealth Tyger Valley. suzean@brenthurstwealth.co.za