Let’s face it; times are tough. Creating a strict budget (and sticking to it) does help order your personal finances, but the cost of living in South Africa makes it difficult for many to live a modest lifestyle, save money for retirement, and remain debt-free.
Life is expensive, and my word, do the expenses keep coming. If you’re covering the basics – groceries, healthcare, hygiene, transport, and rent – an average family of four can be faced with costs of R15,000 p/m. When the average salary in SA is just over R23,000 (according to Business Insider), you can see why many take on debt just to stay afloat.
That’s before you factor in medical aid, insurance, school fees, and luxuries like holidays and school outings. With all these expenses, how are you to save for retirement, a home, and a rainy day?
Many people – especially in these dark financial times – have taken to trimming their budgets with surgical precision. You may think your budget is as frugal as it can be but there’s always room for improvement.
To use a motoring analogy, take the Porsche 911. It’s a prime example of precision and perfection. German engineers toiled and fussed over every centimetre of the sports car to ensure that it is the best it can be. It goes around a racetrack like a lightning bolt. It cannot be faster. The end.
Or is it? Converting it into a race car takes time. Stripping everything that isn’t essential – the leather seats, noise insulation, and all the heavy luxuries – will suddenly have it lapping a racetrack a lot faster – and with far more efficiency, too.
Think of your monthly budget as the Porsche. It’s time to strip every non-essential and squeeze every last cent out of that budget.
No-spend days
One way to do this is by implementing no-spend days. I personally do this and look at it as a challenge. Dedicate one day a week (or a month) and challenge yourself to not spending any money. Over time, those small savings begin to add up. You also begin to realise that you really don’t need to spend your money.
Evaluate your expenses
Gym memberships are costly. Be honest with yourself: When is the last time you went? If the answer is, “I can’t remember”, you’re basically giving R500 away each month. Look at your entertainment budget, too. Do you really need Netflix, DSTV, Amazon, and Showmax? Pick the one you use the most and stick with it.
Insurance
Chances are you’re still working from home. If that’s the case, check with your car insurance provider to see if they will offer you a discount for driving less (if they haven’t done so already). Also, as personal finance author Sam Beckbessinger writes, shop around for insurance. Compare your quotes with other companies to see if they can reduce your premiums. You may find yourself saving hundreds of rands each month.
Transport
While public transport is the best way to reduce your costs, South Africa’s network isn’t known for reliability or efficiency. If you own a car, consider trading down. Now that we’re less reliant on our cars, it’s rather pointless having a larger-engined SUV sitting outside when a more economical hatchback could do the same job for less. If you do find yourself commuting to and from an office, consider a lift club. With Covid, people may be reluctant to do so, but by following the hygiene protocol, you could save yourself a few bucks.
Be mindful of everyday expenses
Not many people are looking over the electricity and water bills with an eagle eye. But it can save you some money in the long run. I’m not suggesting for one moment that you become a penny-pincher – analysing every cent – but by being mindful of water and electricity usage, you’re saving a few rands and helping the environment out too.
Home-made is best
Yes, it’s so convenient to grab a sandwich and a coffee from a cafe or supermarket at lunchtime, but let’s add those expenses up quickly. A black coffee can, shockingly, cost R20. A sandwich is R40. That’s R60 a day on a very basic, modest lunch. Doesn’t sound like much until you realise it adds up to R1,200 a month. Wake up 10 minutes earlier and pack your own lunch. After a year – hypothetically – you could save R14,000.
How have you trimmed your budget? Let me know in the comments below or send me an email at [email protected].
Read more:
- Affordable property investing made easy – On the Money with Jarryd Neves
- The magic of compound interest – On the Money with Jarryd Neves
- Creating a budget (and sticking with it) – On the Money with Jarryd Neves
