After a tough 2020, most of us probably indulged in end-of-year festivities, and this indulgence probably hit our bank account hard. With 2021 upon us, it may be time to buckle our belts and find ways in which we can stop bleeding money. This sentiment is often easier said than done – especially when budgets are tight. However, there are simple ways in which you can make a budget and save money.
Here are some of the top ways to save money this year:
Track how much money you spend
Many of us tend to spend each money without taking the care to collate how much money has left our bank accounts. By simply keeping a close eye on what you spend each month, you will likely start spending less. It is important to take note of how much you spend daily and what debit orders you have set up. Then, categorise what are your essential expenses and what expenses are of a more frivolous nature – it’s all about needs versus wants. Your needs will always come first, and you shouldn’t mess with these expenses. Should there be extra money left over after you’ve saved a predetermined amount, then that extra cash can be spent on your wants.
Ensure you make it a priority to pay yourself
This may sound like a strange directive, but what it essentially means is that each month you should aim to save at least 10% of your earnings before tax. A good way to ensure that this happens every month is to automate the process – set up a direct debit order that will be directly moved from your income to a separate savings account at the beginning of each month. In this way, you will make sure that saving becomes a habit and you will quickly start building up a nest egg or emergency fund.
Manage your grocery spending better
You would be surprised how much one wastes a month on unnecessary items during a grocery shop. Once you have drawn up a budget, you will be able to draw up a budget that will indicate how much you should spend each month on your groceries. To stick to this budgetary limit, you can plan your meals in advance, make a shopping list, and buy everything you need in one trip. Cutting your shopping trips to once a week will ensure you avoid temptations, are more disciplined and buy only essential items. You should also be wary of specials; while they can be extremely useful if it relates to goods you usually buy, it can also result in impulse buying. It helps to monitor online purchases on a regular basis.
Reduce your electricity spend
Everyone in South Africa is well aware of the considerable electricity challenges that the country faces. Saving electricity is not only a good way to play your part in reducing energy concerns, but it will also help your own pocket, with Eskom’s electricity prices having increased by about 356% over the past ten years. To achieve this goal, there are various common-sense tips that you can follow, including:
- Switch to energy-efficient LED bulbs
- Reduce the temperature of your geyser to 55 C or less – or consider installing a timer on the geyser
- Run a full load in the washing machine and dryer, and use cold water whenever possible
Pay off all your credit card debt
Excessive credit card debt doesn’t only affect your wallet, but your psyche as well. High interest rates and debt leave you in a financial quicksand that you can struggle to emerge from. The best course of action you can take to reverse this course is to stop your credit card spending and focus on paying off all your debt, step by step. Set out a plan to achieve this:
- Organise your cards in order of their interest rate, from highest to lowest – pay off the card with the highest rate first.
- Pay off as much debt as you can every month.
- Try to pay more than the minimum balance as this will reduce the interest that you have to pay each month.
If you’re able to save enough money, you may be able to upgrade your current living arrangements and buy a new home through Leadhome – check out our current listings. If you simply want to upgrade your rental situation, we also have a host of great rental options available.