Don't ignore the economy

The word economy has been affiliated with an air of boredom and a stigma that suggests only the smart people should know about it. It is rife with discombobulated jargon to confuse the masses into not understanding how the world works. Understanding the economy will help you not just in terms of long-term decision making but even your day to day decision making. Its important that every citizen in a country understand her economy so not to be caught with your pants down. I hope this piece makes you wanna know more about the economy.

The economy is not just about fiscal policies, REPO rates, Prime rates etc. The economy is about the money in your pocket, the job you wake up every morning to go to. The economy affects your decision to buy a BMW or a Ford and also menial things like to buy albany bread or sasko bread. Understanding the economy will help you know why things around you are happening the way they are, why petrol is going up, why unemployment rate is going up etc. When your manager tells you the company is cutting on some costs to maintain the budget, you will have foreseen it from incidents leading up to this. We all on a mission to be rich and have no stress from monetary shortfall. Let me tell you a secret, with little to no understanding of how the economy works your chances of living in abundance are almost bleak. The first step to understanding the economy is to break away from the bubble of ignorance. A bubble where you think life is all about you and whatever happens around you doesn’t affect you. This is basic thinking because like it or not, as long as you're breathing in the confinements of a country...all that happens in and around it does have an effect on you. With that said let me give you a brief summary of the current state of the economy of South Africa. 

Our economy is not in crisis but we are certainly in distress. The number one reason for expecting difficult economic conditions ahead is the state of South Africa’s consumers. Consumers owe over R1 trillion to various creditors. Around 20% of people selling their homes in South Africa in the third quarter of this year did so “in order to downscale due to financial pressure.” “The vast majority of South African households are forced to restrict their spending by mid-month, regularly run out of money before month’s end, sometimes skip meals, and are often forced to borrow money to keep their heads above water.” Yet another sign of distress can be seen in the fact that over the next three years an additional 1m South Africans will become eligible for government grants. This is particularly alarming in light of the fact that, according to the latest Tax Statistics data published by SARS, only 4.3m or so South Africans actually paid income taxes over the last year (although all South Africans pay VAT and various other taxes), putting the ratio of income tax payers to grant recipients at close to 4:1. And as if all that isn’t enough, inflation is on the rise. Rising inflation eats away at spending power, and will further stress struggling consumers. With high unemployment, rising consumer debt and dependence on government grants, and ever-higher inflation, the outlook for South African consumers is not great. All of this, taken together with the ongoing negative impact of the wildcat strikes that shook the country over recent weeks, adds up to a very gloomy picture. While government is doing its best to manage the economy with prudence and care, there are simply too many deeply entrenched problems that are making it impossible for SA to grow fast enough to meet the needs of her citizens. Unless some radical policy ideas are implemented, or the global economic environment improves dramatically, South Africa is in for a slow and painful few years. [by Felicity Duncan]

The economy is part of your everyday life. From politics, exchange rates, your taxi fare, retrenchments at the work place etc. These are all effected by and will affect the economy. The economy can be both your friend and an enemy. If you know her she will treat you right but choose to ignore her and she will leave you in a devastated and desperate state. Don't ignore the economy.