It’s official, life just keeps getting more expensive: The petrol price broke the R16 per litre mark this month and with a Rand that is 8.6% weaker against the Dollar since the beginning of June, we might pay more for other things too. With ever-increasing fuel costs and other rising expenses keeping South Africans on financial tenterhooks, now’s the time to take stock of your purse and take back control. While there’s usually no such thing as a quick fiscal fix, there are some smart financial hacks that may just make a huge difference.
As a Senior Financial Planner at Sanlam, here are some of the hacks I often share with clients to immediately start turning their financial situations around. The key is perseverance. It only takes 21 days to form a habit and – as with anything – the hardest part is often getting started. Start today – you’ll be surprised how quickly it makes a difference.
Ditch expensive debt
Review your loans including mortgage and vehicle debt, credit card and retail accounts. Plan to repay the most expensive (or highest interest) debt first. It’s tempting to buy on credit, but you often end up paying more for your purchases because of expensive interest. Try and repay these accounts over a few months, ditch the cards and buy with cash in the future.
Why it takes your finances from zero to hero: Save the money you would have spent on debt in a smart savings vehicle. Then, instead of paying high interest, you could be earning it.
Spring clean your bank account
Take the past three months’ bank statements and check every single detail. Check all costs, fees and banking charges. Determine whether you optimally use the monthly package you pay for. You could consider downgrading to a more suitable package or even switching banks if you see that you can pay less for the services you need elsewhere.
Why it takes your finances from zero to hero: As an example, if you are able to save R40 per month on banking charges and fees, it will be R480 yearly, which could possibly cover the cost of your mobile account for a month.
Review your subscriptions
Review your TV subscription(s), data and Internet provider costs, as well as gym or club memberships. If you do not use any of these often, ask yourself if you still need them.
Why it takes your finances from zero to hero: Based on my experience, you can save approximately R99 to R899 per month, just from cancelling or downgrading subscriptions. Don’t let these savings go unnoticed. Use them to repay expensive debt and save the balance.
Packing lunch is a great way to cut down on costs, plus you’ll probably eat more healthily.
Why it takes your finances from zero to hero: This tip will never go out of fashion. If you are able to save just R20 per day, it amounts to R100 per week, which could add up to about R4,000 if you do this for 40 weeks of the year.
Borrow before you buy
Next time you’re in need of a gadget or home appliance, message a friend or ask a neighbour if he or she has one you can borrow. There’s no need to invest in a fancy pasta maker if you’re only planning to use it once. If you do have gadgets gathering dust, consider selling these for extra cash.
Why it takes your finances from zero to hero: Play the five-day game. If you still want something after you’ve thought about it for five days, then maybe it’s worth it. If not, you should probably take that money and put it towards your emergency fund instead.
Budget – create one, review it frequently and stick to it
This should be the cornerstone of your financial planning. Split your budget into a long-term (e.g. provide for retirement), medium-term (e.g. education) and short-term (annual and monthly household budgets) plan. Involve all family members in the planning process to make the household budget work.
Why it takes your finances from zero to hero: Budgets get you to review your finances, manage it more effectively and set longer-term goals.
Never go without a shopping list
It’s always dangerous to shop without a list, especially if you’re hungry and in a grocery store. Follow two golden rules: stick to a list and consider buying in bulk when it benefits you to do so. When buying in bulk, compare the unit costs. For instance, if it costs R100 to buy 5kg but R17 to buy 1kg, you’ll pay less when you buy multiple 1kg packs. Remember, lists also mean you’re less likely to forget items, which could cause unnecessary repeat trips to the shop that waste time and precious petrol.
Why it takes your finances from zero to hero: Use bank statements to work out just how much impulse shopping is costing you. Curb the spending and put the money towards a medium- to long-term savings goal.
Beat the transport blues
Walk, take public transport or carpool with a colleague. Beat soaring petrol prices by travelling smartly.
Why it takes your finances from zero to hero: With petrol prices increasing again, cutting back on drive-time can mean big savings.
Get a personal financial trainer
Trying to budget, spend less and save is very similar to trying to work out all by yourself. It is easier to join an athletics club or commit to exercising with a friend. Just like you need a fitness coach, you need a financial one. Find a personal financial trainer who you can be accountable to and build a relationship with.
Why it takes your finances from zero to hero: Your expertise might not be in saving and finances. It could make you feel stressed. Rather consider visiting a financial planner. Together you could work on a plan that could improve your finances and, as a result, your future outcome.
Never lose hope
Remember that you are not the only one struggling to balance your budget.
Keep going, no matter what or how many times you fail. Draw up a budget and stick to it.
Why it takes your finances from zero to hero: Make small changes by cutting expenses, reducing your debt and saving as much as you can. Over time it can have a huge impact on your financial outcome.
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