The effects of Covid-19 lockdown have left a lot of South Africans financially strained. Scores of people have lost their jobs while those still working have accepted the salary cuts and fewer working hours.
These effects should get you thinking about your relationship with money, how you can best manage your finances. If you were not saving, you might be also thinking that it would have been better if you had saved for a rainy day.
Well, developing a saving habit might be a real challenge but it’s doable and the benefits are enjoyable. In this article, we walk you through different ways you can follow to start saving with less hassle.
This is an easy to follow saving guide, broken down into daily, monthly and long term saving tips you can adopt.
Your daily routine determines your spending, if you can monitor how you carry yourself throughout the day then it will be easier to take control of your money. Simple changes in your daily activities can put you in the right direction toward your savings goal.
Below are daily tips you can adopt:
If you use cash for your daily purchases, you will realize that you mount up some coins and R10 notes you got as change throughout the day. Teach yourself to empty your pockets and car ashtray daily, collect and put that change in your savings.
The amount you collect might look small at first but you will be surprised at how much those few rands will amount to by end of week or month.
Sometimes we come across things we like while in the shopping area, things we didn’t budget for, even if you are carrying enough cash don’t fall into buying. If it was not in your shopping list then it should wait.
Allowing yourself to breath for some days after seeing an item you like will help you avoid impulse buying. Sometimes you end up realizing that you didn’t really need some of those things you liked the first time you saw them.
Even though you set aside a monthly budget for electricity, water and food we would all agree that these expenses have both fixed and variable elements. Developing economic consumption habits of these expenses will save you a lot of money.
The usual culprit is the geyser expense. Teaching yourself to switch off the geyser during the day when there is no one at home will reduce your electricity bill.
Home-cooked meals are less costly than buying takeaways every day. Normalize packing lunch to work and school, save the money you would have spent on lunch. The money you spend on lunch at work or school may not seem like much, but it will add up over time.
Write out which meal you will cook on which night in advance, this nullifies the need for excessive food purchases. And if you’re shopping for food items make a grocery list and stick to it.
We all know we should lead a healthy lifestyle, even though it’s easy to ignore this fact. A healthy body has a healthy mind and a healthy bank account. Taking care of your health daily, will not only save you from lots of medication which you would have to buy but also lessens your spending.
Couponbox.com and MyProtein conducted a study which proved that frequent take-out can cost 193% more than a diet comprising mainly fresh, home-cooked meals. This shows that a healthy diet can cost almost 50% less than an unhealthy diet (mostly take outs).
This obviously means you should also get used to drinking water as your main source of hydration rather than expensive soda drinks which are unhealthy.
You might have developed a habit of passing through the garage daily to buy expensive coffee before work. Sometimes your morning feels incomplete without that coffee run, but the truth is, it’s taking a lot of money.
Look at it this way, if you are a buying R22 coffee daily, thus R11O per week, which means you could save R5720 per year. This you can do by merely taking out that habitual coffee run or any other habitual spending you might have developed over time.
Here are a few ways you can save money every month:
The very first step to taking control of your money is putting a monthly budget in place. A budget is merely writing down all your income on one side of the paper and all your expenses on the other side.
A budget will help you identify all your income and expenditure. It will help you identify which expenses need to be cut and how much you are able to put aside as monthly savings.
When looking at the total consumption expenditure of average South African households, 35% of the money spent went to rent or property rates.
To cut on rent, you might have to talk down your landlord and explain how your income has been affected by the Covid-19 lockdown.
The other biggest expense is the interest you pay on your bond. If you have been in your property for some years, start requesting fresh quotes from other lenders, or engage with your bank concerning the matter.
Take a look at debit orders and auto-renewing subscriptions you may have and assess whether there are any non-essential expenses you will be able to cut back on.
Since gyms have been closed down during the lockdown, you should now be used to working out from home. Therefore, you can carry on working out from home and cut on gym expenditure.
The World Wide Worx “More Month Than Money” survey done by TymeBank found that 76% of South Africans run out of money before the end of the month. 43% of those borrow money from short term lenders to get through the rest of the month.
Most short term lenders have high-interest rates that will shrink your monthly income as some of it will go straight to service the debt. Avoiding the obligations of having to pay these high interests will help you save money.
Vehicle expenditure is usually the second largest expense in most South African households. Look at how much you spend on fuel, insurance, repair and maintenance of your car. The monthly cost is quite a lot; hence you have to be vigilant on how much you spend on your car.
Fitting a tracker system in your car will cost you money upfront but in the long run, you’ll get to save more on insurance premiums. Also, get insured by a company that will give you discounts or rewards for good driving and efforts you make on lowering risk.
Apart from insurance, you can also save by planning your trips to avoid unnecessary errands that will cost you on fuel.
R100 you save today will not have the same value by year-end. As you put aside some cash to save, it is wise to deposit it in an interest-bearing savings account. This will encourage you to save even more because the little you have already saved will start earning you interest.
After about 6 months, take a closer look at your monthly budgets to identify where most of your money goes. If you realize that your monthly airtime bill is always high, then you might have to check for better deals from your network provider.
Identifying your biggest monthly expenses will help you find a better way of accessing the same goods or service in a cheaper way.
We all have something we aspire for, be it a car, new house or to venture into a certain business. Writing down the time frame and target amount you would need to realize these dreams will give you a clear picture of how much money you should start saving every month.
Written goals are a fuel that drives us to stick to our saving plans. It always stays as a reminder of why you have to continue saving even when tempted to do otherwise.
Since you have set yourself long term goals, you might consider opening an investment account to help you achieve the goals.
There are different ways you might invest your money, from stocks to bank fixed deposit accounts.
Although making the most of the present is important, there are plenty of good reasons to save in order to look out for your financial future.