29 April 2019, by William van Wyk
Whether you want to start saving, investing or pay off debt, it might seem impossible with your budget.
Well, that’s what most people feel when approaching their finances; that there isn’t enough money to start with.
Here are some ideas on where you can possibly find money in your existing budget.
Your Pay TV subscription is easily one of the things you can do without. Currently, some Pay TV bouquets cost R800 per month - that’s R9 600 per annum.
If you simply cannot do without screen time, there are cheaper options available. You can reduce this monthly expense by doing some research into the various options. This can result in a substantial reduction.
Now, don’t go cancelling your insurance. But you can save by comparing your existing insurance and shopping around.
Make sure you match what you have already, and your coverage remains comprehensive – this can be your personal insurance, car and household insurance.
Review your policy documents and ensure all the details are correct. For example you could have been recorded as a smoker when you are not.
The policy can be revised, and the premium can change to a lesser amount. Even if it’s not a lot of money, you still get a saving.
Another culprit is doubling up. I have seen so many people who have income protection cover with both their employer and in their personal capacity. Income protection provides a monthly income over a certain period. It doesn’t come cheap and if you ever had to claim from your income protection insurance, you would not get both amounts from your employer and your personal insurer. This will be aggregated, and you will be paid only one amount.
So, while reviewing your policy documents, make sure you do so in conjunction with your employer benefits.
Some expenses just don’t make sense in our budgets. I have a friend who has a had a gym membership for the past 3 years but has never set foot in the gym since inception of the contract.
That’s a whopping R500 a month for the past 3 years. That’s R18 000 pretty much gone down the drain.
Even worse, I have seen people with a nationwide membership, which comes at a higher premium than the normal membership, but they have never set foot in their local gym.
Considering that most unit trusts and exchange-traded funds start from R500 monthly, you can certainly put your money to better use.
For the gym fanatics who don’t want to do away with their gym memberships, there are cheaper options available. Research can yield a cheaper result.
This might seem like an insignificant thing to do but writing down exactly what you need before going grocery shopping can save you a significant amount of money.
How many times have you gone shopping with a “good idea” of what you need around the house and end up buying a lot of what you don’t need? Or arrive back at home with everything else except the items you intended to buy in the first place.
When you write down the list you minimise buying those extra items you don’t need.
Better yet, there are stores that offer online grocery shopping and delivery. I find this to be the most convenient way to shop, saving you money and time.
When I finished studying and started working, I was chuffed that with a few years of experience and my earnings, I could upgrade my bank account to private banking.
Mind you, I didn’t earn a lot of money but the “prestige” of having a private banker was appealing.
Needless to say, I used those services only once when I notified my bank of my trip overseas at the last minute, otherwise I had been paying more than R400 a month for this prestige.
I have since shopped around for an option that is still comprehensive but not as expensive. So, do the same and see if your existing bank can offer you more bucks for your money. Some banks offer bundling offers which includes all banking related costs for as little as R65.
Keep an eye out for those R99 scams, in which R99 is debited from your account every month without your consent.
In a financial education session a few years ago, a client had not paid attention to her bank statement. As we went through her statements as far back as six to eight months, every month there were three deductions of R99 going off her account.
Be vigilant and look at your bank statement often, it may save you money.
In the words of Benjamin Franklin: “Beware of little expenses. A small leak will sink a great ship.”