(MENAFN- The Conversation) The price hikes for essential goods such as food, petrol and household appliances are a global problem, but the region suffering the most from the rise in food prices is sub-Saharan Africa. The knock-on effects of supply chain disruption caused by the COVID-19 pandemic, climate disasters leading to food insecurity and energy shortages have pushed up prices.

A report by Numbeo, which contains the world’s largest cost of living database, found that South Africa is the ninth most expensive African country to live in and the country with the highest cost of living (in terms of food, transport, utilities and restaurants) in Southern Africa. The index shows that Ivory Coast is the African country with the highest cost of living, followed by Senegal, Ethiopia, Mozambique and Mauritius.

Consumers have had to cope with food prices by planning their meals or buying in bulk to save money. Unilever’s food company Knorr found that the average South African was also skipping breakfast, eating two meals on weekdays and only eating breakfast on weekends.

After years of researching personal finance and development finance, we have developed a keen interest in understanding how consumers manage their resources to address economic challenges such as the cost of living crisis. Now is a good time to be financially prudent and plan how you can make ends meet during these difficult times.

It’s important to know how to tackle the cost of living crisis, whether it’s through paying down debt, saving strategically, or monitoring the expenses that eat up a large portion of your income. Paying attention to where you can increase your savings or reduce expenses can make a significant difference to your financial well-being.

Because everyone’s financial situation is different, this should not be taken as financial advice. It is always best to speak to an authorised financial services professional. Some of these suggestions may only be useful to those with access to banking services and those with a regular income. With these caveats in mind, we outline three areas to consider when navigating the cost of living crisis.

1. Consolidate your expenses

Check where you’re paying twice for the same expense. A good example is bank fees. If you bank with more than one bank, chances are you’re paying bank fees for similar transactions at different banks. By managing your finances with one bank, you can reduce bank fees.

Another example is subscriptions to streaming services. Think about how many accounts you have on Netflix, YouTube Premium, AppleTV and Showmax and ask yourself: how many of them do you really watch? All the fees add up. As Benjamin Franklin, the former US statesman, once said, “Beware of small expenses. A small leak can sink a great ship.”

2. Pay off debts

As the cost of living crisis pushed more South African households into debt, nearly 50 percent of South Africans found it OK to take on debt to cover household expenses such as food, clothing, furniture, appliances, electricity and water, according to Nedbank’s Financial Health Report. In Nigeria, too, consumers are resorting to loans to cover their daily expenses as inflation rises.

Taking on more debt as living costs rise can easily sink you even deeper into debt. Instead, coming up with a plan to pay off debt can eventually free up your cash flow.

There are two strategies you can try: the debt snowball approach or the debt avalanche method.

The debt snowball approach involves paying off the smallest debts first before moving on to larger loans. Seeing your debts disappear will motivate you.

The debt avalanche approach tackles the debt with the highest interest rate first, saving you the most money by eliminating your high interest repayments.

Whichever approach you choose, seek the opinion of a professional financial advisor.

3. Save in small groups

Saving provides financial security and a buffer for unplanned financial expenses. And it helps you reach your financial goals. While households with irregular incomes are more likely to struggle to build savings, savings opportunities can come in the form of reducing shopping costs, for example by switching to supermarket brands (which tend to be cheaper) or buying household cleaning product refills.

In general, most people who actively save keep their savings for vacations, emergencies, future purchases, and long-term goals all in the same account. The problem with this approach is that when you need to withdraw money from the savings account, you don’t know which part of your savings you’re withdrawing from.

One way to organize your savings is to break them down into the categories you’re saving for. This could be done in a spreadsheet that shows how much you’ve saved for each category. You can clearly see your savings growing for each goal, encouraging you to keep up the savings momentum.

If you want to go a step further, budget apps like 22seven let you create personalized budgets based on your actual spending patterns. This free app lets you set limits on your spending and track how much you’ve already spent.

For example, you can decide how much you want to spend on living expenses (like eating out or shopping) and receive a notification when you’re close to reaching your spending limit. However, it’s important to exercise some self-discipline and not overspend when those funds are depleted. And while this may seem like just another app to install, think about how easy it is to whip out your debit card in everyday life and spend more than you planned.

Sometimes we need to take action to protect ourselves from ourselves, and this is one of those actions.

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