[Rek jou cheque] Put some away for rainy day: Change habits this savings month with these tips
July is Savings Month.
Having some savings (especially when emergency strikes) is undoubtedly a good thing to have – but many people are struggling just to make ends meet.
Having a savings account with extra cash actually seems to be a luxury these days. It’s also very difficult to save when most of your income is going towards paying your debt.
DebtBusters’ third annual Money Stress Tracker survey, one of the largest online surveys about how financial stress impacts South Africans’ lives, received responses from 26 000 mense on how their finances were affecting their lives.
Results reveal that of the 75% people who said they felt financially stressed, 93% said this was negatively affecting their home life, 76% their work life and 74% their health.
So how are we supposed to be saving, when we are struggling and stressing just to survive?
Sarfaraaz Hamza, CEO of ezDebt, advises South Africans to try and save, even the smallest amount.
“South Africans should be looking at their overall financial well-being. This includes being able to comfortably manage their monthly debt instalments (while striving to become debt free) as well as having the safety net of some savings as well as a financial plan for their retirement years.”
Hamza acknowledged the financial struggles of South African consumers, and went on to give some valuable tips which could lead to more household savings:
1. Follow a budget
There are still too many people who don’t have a household budget. You have to start somewhere. Every month, add up all your income (after tax) then subtract how much you spend. There are many apps (including banking apps) that can be used for budgeting or you could simply go old school - write down all your income and expenses. The key is to be honest, and set a realistic budget you can stick to.
2. Draw out a set amount of cash each week
Swiping cards and contactless spending make it easy to overspend because no physical money is exchanging hands. One way to better manage your spending is to draw a set amount of cash for the week and try not to unnecessarily use your cards.
3. Hold back on the take-outs at home, and everyday coffee and lunch spend at work.
It may be hard to get out of the habit of getting take-outs, but do yourself a favour and add up how much it is costing you every month. The same with buying coffee and lunch at work everyday. To make a difference in our spending habits, we have to make some mindset shifts, and that includes changing our spending habits on consuming food.
4. Go back to basics and start comparing prices – but be clever and practical about it.
Many businesses use social media platforms like Facebook, TikTok and WhatsApp to advertise their weekly specials. Make the effort to compare prices – but also check to see how far physically far apart these specials are from each other. It makes no sense to save R10 on a packet of washing powder, but then drive out R100 worth of petrol to go and get it. Make sure that any savings you are getting is overall worth your while.
5. Manage your electricity spend
With the increase in electricity tariffs, we need to make a concerted effort to check our electricity usage and spend and manage this accordingly. There should be no shame in switching off lights, geysers and appliances. Every household has to find what works for them.
6. Resist the urge to do online shopping
Being able to buy something with a few clicks rather than use cold hard cash makes it harder to keep an eye on your spending. Limit your shopping online and then only use sites you trust.
7. Take advantage of loyalty programmes
Loyalty programmes are not free, they are actually a reward for your commitment to a particular brand. And like the saying goes – never look a gift horse in the mouth. Use the discounts and specials being offered to you. You’ve earned it.
8. Stop shopping and spending money to make yourself feel better
Shopping (spending) can give us short-term highs and provides an escape from depression or anxiety. We feel good for a little while, and it may even bring us a much-needed smile - but it can have debilitating consequences on our finances. If you’re feeling like your shopping habits are out of control, talk to a friend, find another activity that makes you feel good, or seek help from a doctor or therapist.
9. Watch your banking charges
Make the concerted effort to check your bank charges. Do you really need to be spending a few hundred rands more per month, so that you have a specific colour card that has features that you don’t even use? If you don’t ever travel – why pay for better “out of country” promotions, or even for access to travel lounges on a more expensive banking package?
10. Be clever with your debt.
Pay your most expensive debt (that with the highest interest rates) first. Don’t be in denial about your debt.
Hamza added: “Cutting back on spending in one part of your life, only to spend unnecessarily in another part makes no sense. The idea is to take the money you are saving by spending less – and set it aside (whether in a money box, a cooldrink bottle or a bank account) for when you need it. We need to shift our mindset from ‘saving is a luxury’ to ‘saving is a need’.”
dailyvoice@inl.co.za