No-one likes to hear the word budget, but with these quick and easy budget tips, cost-cutting and small changes can become big savings.
Set specific goals
Saying, ‘I want to save some money’ is not good enough; ‘I want to save R5 000 by June’ is easier to work towards.
Work out your income versus your expenses
How much disposable income do you have to work with? This amount will give you an idea of how much you can realistically save.
Make it definite
Put your budget into writing and leave it somewhere that you pass often (the fridge is a good place). It’ll make the concept of budgeting more concrete and will help you to see your progress (or lack thereof).
Deal with debt
1. Pay off the smallest amount of your short-term debt first: This includes credit cards and store cards, as these have higher interest rates than your long-term debt does. Work your way upwards and then deal with your long-term debt in the form of your bond and car repayments. (You might want to consolidate this debt to save paying extra interest. It is not, however, a good idea to consolidate short-term debt, because you will pay if off faster if it is left separate.)
2. Average out costs for regular expenses such as food, petrol, etc: This will give you a concrete guideline to work with instead of a guesstimate. Remember, though, that you will save the most money by cutting what you spend on entertainment and clothing.
3. Cash is king: Get rid of all store cards and credit cards while you’re trying to save. If you can’t pay for it in cash, then you don’t need it right now. Another idea is to monitor your ATM withdrawals. Decide on the amount you want to draw and stick to it. Decrease the amount each week and put the extra money into a high-earning interest account like a call account or money market account.
4. Take advantage: Use things like medical aid refunds and tax rebates to pay off your car and credit cards.
5. Save! Have a set amount debited from your account into a savings or money market account as soon as you get paid. This way there’s no chance you will accidentally spend it.
Read more: 12 smart ways to save money in your own home
Cut costs easily
1. Take a packed lunch. If you usually spend R20 a day on bought lunches, that adds up to R400 a month.
2. Evaluate things like insurance policies, and cellphone and gym contracts. Could you save yourself some money with a different policy or contract?
3. Know where your money goes. Keep a small notebook with you and write down every purchase you make – quick dashes to the garage shop a few times a week add up – this will help you work out where you’re spending money unnecessarily.
4. Save money on ‘basic’ clothing – don’t spend any more than you need to on gym stuff, plain shirts, etc.
5. Close unnecessary bank accounts – they’ll cost you a fortune in bank charges over time.
6. Sort out your wardrobe and ditch the clothes you don’t want. Have a jumble sale to get rid of them, and make some extra cash.
7. Look at your vices. Cigarettes can cost up to R30 a box. Half a pack a day works out to about R105 to R120 a week –
that’s over R480 a month. Stopping smoking could also save you money on doctor’s bills.
8. Shop online – it helps to curb impulse buys. But check the kitchen cupboards before you go online – we tend to buy out of habit, not because we’ve run out of an item. Internet banking will also help limit random spending.
9. Limit the amount you treat yourself. One cappuccino a week, instead of five, or one dinner a month at a great restaurant instead of regular takeaways will save you money.
10. Don’t make the mistake of buying things because they’re on sale – this is simply unnecessary spending, and you’re not really saving at all.