Whenever I catch up with friends or colleagues it becomes clear that a common concern is the cost of living in recent times. If you go on social media, you will see that it is openly a universal problem. This is something everyone worries about because we have responsibilities that require financial means.
The best way to explain the cost of living is that it is simply the amount of money that a person needs to have to cover basic expenses. This is affected by the area you live in, the types of basic needs you have, and your responsibilities. There can therefore be differences in the cost of living between someone who lives in South Africa to someone in the United States of America. It is also important to remember that the cost of living has been increasing over time, this is why we find that we for example cannot afford to purchase a home the way our parents did 20 to 50 years ago.
If you decide you want to move to a different city, you need to consider the cost of living to determine if you will afford it. You want to find out the cost of accommodation, transportation, food, education if you have children, healthcare, insurance, and utilities. You then need to compare the total costs to your monthly income. If your total income is less than the expenses, then you probably cannot afford the cost of living. To me it is important to afford your expenses, have money to save, invest and have a bit left over for leisure.
I am someone who likes to look at the bigger picture. Someone driving an expensive car does not mean they can afford the cost of living. Do they have investments and savings? When they die, what will they live behind, a future for their family or debt? This is the reason why I am not a fan of the “Influencer” because most of them advertise false abilities.
There is a lot that goes into making sure you afford your life, income level, the budget, insurance, savings, investments, retirement preparation, and understanding the effects of the master of all, inflation. I will soon go into more detail on these topics but today I want to leave you with a question. Can you afford your cost of living?
