In these uncertain economic times, we all want to stretch our budgets a little further. With a few simple financial habits, anyone can save some extra cash each month. So, if you're ready to start saving but not sure where to begin, here are ten handy tips to get you started:
Keep an eye on where your money goes, and you'll naturally start spending less. Keep a record of your daily expenses and distinguish between needs and wants. Needs are things that are necessary to live and function e.g food and shelter. Wants are things that are nice to have, but are not necessary for survival e.g gym membership or a Netflix subscription. Prioritize your needs, and if there's money left after saving a set amount, treat yourself to some wants. Budgeting apps like 22seven can make tracking your expenses a breeze.
Once you know where your money is going, create a budget. First add your essential fixed expenses, like rent, insurances and car loan repayments. Then allocate a reasonable amount for other monthly expenses, like groceries, toiletries entertainment etc. If you have money left over, resist the urge to spend it and rather transfer it to a savings account. If your expenses exceed your income, find areas to cut back. For example, you could save up to R1,000 a month simply by cutting back on your daily cappuccino fix.
A good way to force yourself to save is to automate the process. Set up a direct debit so that a certain amount of money is moved directly from your current account to a separate savings account straight after you receive your monthly salary. Most online banking platforms offer this service. This is a great way to remove the temptation to spend on an impulse purchase and grow your savings instead.
You could save thousands by reviewing your medical aid and insurance policies annually. Negotiate better rates or explore better offers from different providers. You can get an instant quote from Naked Insurance for your car and home insurance needs. As your circumstances change, so do your insurance needs. Review your policies annually to ensure you have adequate coverage, but also check if there are any unnecessary extras that you can remove to save money.
To save on bank charges compare different banks and their fee structures to find one that offers lower or no monthly account maintenance fees. Be sure to compare the transaction costs as well - some people are unknowingly wasting money every time they swipe, draw and transfer.
Credit cards often come with high interest charges, which can add up quickly if you carry a balance. Making only the minimum payments prolongs the debt and incurs more interest. Impulse buying and accumulating debt are common pitfalls, leading to financial difficulties. Additionally, credit cards may have various fees and charges. To save money, consider alternatives like debit cards or cash, which keeps you living within your means and avoids unnecessary debt. Drawing cash and watching it leave your hands is also a good way to keep track of your spending. Reserve your credit card for emergencies only. Practice patience and wait until you can pay for what you want.
While dining out or ordering in is nice, it should be a special treat, rather than a regular habit. Cooking at home is not only cheaper but also healthier. Consider cooking larger quantities and freezing meals to stretch your budget and curb the temptation to order in when you're tired and don’t feel like cooking (and we all know those nights all too well!). If you work in an office, bring lunch to work to save on lunch bills.
Buy non-perishables in bulk for better value. Plan your meals in advance to avoid impulse buys and stick to your budget. Limit your shopping trips and set a time limit to them to resist unnecessary spending. Look out for bargains, compare prices and sign up for customer loyalty programs which usually have great perks and cash-back deals. Being mindful of your grocery spending will help you save money and keep more in your pocket.
Debt is a problem that gets bigger over time if you don't get it under control soon. Organize your debts by interest rates, paying off the highest rate first. Pay as much as you can each month and consider paying more than the minimum balance to reduce interest. Consider speaking to a debt counsellor like DebtLine, if you feel you need some extra assistance.
If you have things that no longer bring you joy, sell them. You can use Facebook Marketplace, Gumtree, Cash Converters / Crusaders, or any classifieds website. Declutter each room and stash the cash from your sales. Remember, one man’s trash is another man’s treasure.
Every little saving counts. By implementing these simple tips, you'll be well on your way to boosting your budget and achieving your financial goals. Happy saving!