Many South Africans are struggling financially, especially after the petrol price increase of R26 per litre. Here are a few tips to save up to R1 800 each month.
Many South Africans are struggling financially, especially after the petrol price increase of R26 per litre.
According to the latest reports, not only the poor are finding it hard to get by, but the country’s middle class is also taking strain.
Consumers have less disposable income than they had six years ago – owing to inflation, a decrease in income and the fact that they are borrowing more money to make ends meet.
Gerrie van der Merwe, a former financial advisor and a lecturer at Milpark Education’s School of Financial Planning & Insurance says that many South Africans spending is not always 100% rational.
He argues that if you are in a tight spot financially it can really help to work out a budget and identify blind spots in your financial behaviour. By becoming aware of these
van der Merwe states, that making a few savvy financial decisions is possible and can lead to savings of hundreds of rands each month.
Here are a few tips to save up to R1 800 each month:
1. Cut down on petrol costs
van der Merwe says that we should become aware of how much it costs to use our cars. “If you are driving to work again, consider asking your boss to work remotely from home one day a week. If this is not an option, consider getting a lift with someone in your building or street or taking a bus,” he says.
An average trip of about 25km (to town and back, based on a 30min estimated drive) could cost around R100 a day in petrol. Could cycling to work be an option? Or perhaps carpooling with colleagues? (Saving the petrol for just one day a week of driving could add up to R400 a month in savings.)
2. Start eating healthy food
“We’ve all got to eat, right? But you have quite a lot of control over what you eat. Considering that the price of meat has gone up by 18% over the past year – this may be the time to experiment with a more plant-based diet,” according to van der Merwe.
“Uncooked steak easily costs around R100-R150 a portion, and delicious meals can be made with alternatives like mushroom risotto. Even if you have steak only twice a month, cutting it out could save R200-R300,” he suggests.
3. Cut unhealthy habits
You know you shouldn’t smoke, but when no one is watching, do you secretly light up and enjoy the illicit habit?
“Consider how much that is costing your wallet (not to mention your health). A packet of cigarettes costs up to R70 these days. If you are smoking a packet a day, do you want to do the math? That alone is R1 800 a month! Even if you limit yourself to a packet a week, that is R280 you could have been saving each month”.
4. Go for a walk – not lunch
Going out with friends is a very necessary part of our lives, we need our friends for moral, social, and psychological support! But you don’t always need to meet them for lunch.
van der Merwe says, “imagine if you went for a walk or grabbed a coffee instead of a costly R150-R200 lunch? That could be a savings of up to R600 a month. Or, if this seems too harsh, how about going for a nice lunch or dinner out only once a month? Don’t be embarrassed to tell your friends you’re trying to spend less money - chances are they are in the same boat as you”.
5. Cut your credit
This is often a bitter pill to swallow for many – but store cards? They are so bad for your bank balance.
“The interest charged on the money you owe means that you end up paying a lot more for your purchase. Very few people look at the interest they pay on their store cards. On an account of about R3 000, your monthly interest payment could be around R50. That may not sound like a lot but over the course of a year it adds up to R600 that you could have used elsewhere. Credit card debt is even worse. If you owe R12 000 on your credit card, your monthly repayment is around R300 for interest alone. Pay off your credit card and cut up your store cards.”
These are simple examples that amount to a saving of R1 830 a month! There are many more things you can do like switching to prepaid accounts for your cell phone and electricity. This is a much better way of keeping track of what you spend on your phone and helps you to manage costs, says van der Merwe.
“One of the best bits of advice I can give anyone is to take the time to do some proper financial planning. Draw up a monthly budget and keep to it,” van der Merwe advices.
“Drawing up a monthly budget will give you peace of mind, and the assurance that your finances are under control. One of the biggest mistakes people make is to take on too much debt and going for debt counselling can really help to focus your mind on what is most important first.”
“It helps to remember that life is not about what you have. Being trapped in a vicious circle of debt and financial stress is no way to live. Almost everybody has to compromise when it comes to their budget – very few people can afford the car or house or wardrobe of their dreams. Instead start thinking of smarter ways your money can work for you – rather than against you.”
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