This is how to stretch your rands during Savings Month

This is how to stretch your rand in the most difficult financial circumstances our country and its citizens have ever been in. With inflation jumping by more than 1% in one month and a repo rate of 5.5%, consumers are forced to save wherever they can and this guide will help you to do just that.

In 2019, even before the onset of Covid-19, the South African Savings Institute (SASI) reported that household debt was staggeringly high, with three quarters of every rand earned going to pay debts, leaving households with very little left for living expenses and even less for saving.

According to Sebastian Alexanderson, founder and debt counsellor at National Debt Advisors (NDA), South Africans are notorious for being bad savers, but budgeting is a great way of taking control of your finances.

“When you budget, you know exactly where all your money goes, where you can make adjustments to save even small amounts, as well as how to effectively save and leave enough money for unexpected expenses and emergencies.”

Alexanderson says that by saving money, you can avoid debt, which in turn relieves stress. If you have overwhelming debt, seek help sooner rather than later, and address it while ensuring you keep your compulsive spending at bay.

“While many people understand the importance of budgeting, most have found that figuring out an effective budgeting method and sticking to it is often easier said than done. Nevertheless, budgeting doesn’t need to be complicated, nor should it take hours out of your day. In fact, the best ways to budget are often the simplest,” concludes Alexanderson.

ALSO READ: Comparing prices is a skill – Here’s how to save cash

Get rid of debt

You cannot really stretch your rands if you have debts. Nobody can buy a house or car cash, but the best rule of thumb is still that less debt is the best way to save. Leave your cards at home when you go shopping and only take a debit card to e4nsure you do not buy what you cannot afford.

Also decline any offers to make more debt and pay as much as you can afford in addition to normal payments so that you can pay your debts off faster.

Stretch your rands on financial services

• Shop around and choose the cheapest option for banking.
• Pay a bit extra every month on your home loan to save on interest, especially while interest rates are increasing.
• Do not buy on credit. Pay cash for necessities and save for expensive items.
• If you use a credit card, ensure you pay off the balance very month to save on interest.
• Ensure you pay the lowest possible premiums for insurance by negotiating with your insurer for a better price.

It is not a good idea to stop your insurance cover. “There is no doubt that many consumers see insurance as a grudge purchase, but it is a critical tool to protect our homes, cars and possessions,” says King Price’s client experience partner, Wynand van Vuuren.

He advises consumers to talk to their insurers, bundle their policies, review their current insurance, review their excess and reduce their risks to stretch their rands.

ALSO READ: Repo rate increase will hurt consumers with debt, but benefit those with savings

Save on your car

Consumers are already trying everything they can think of to save on petrol as the price is so high. You can also stretch your rands on your car by:

• Having your car serviced regularly to use less fuel and avoid large and expensive mechanical failure.
• When you fill up, also have the attendant check the oil, water and tyre pressure.
• Your car will use less fuel if the tyre pressure is correct and the tyres are changed regularly.
• Plan you rides to ensure you do not drive up and down for nothing.

Save on your cell phone

• Buy a cheaper cell phone and pay cash for it.
• Plan your calls to use your free minutes.
• Check your cell phone statement every month and cancel add-ons that cost extra.

Stretch your rands at the shops

• Look out for special prices.
• Compare the unit prices on the shelves and buy the cheapest size.
• Use discount coupons wherever you can.
• Plan your shopping by compiling a list and do not stray from it.
• Buy fresh produce that is exempt from VAT.
• Compare prices to see where you can save.
• Buy expensive items of clothing, such as coats and jackets, at the end of winter on sale.
• If you want to spoil yourself, postpone it for a few days and see if you still want it.

ALSO READ: Proper budgeting can save you from financial ruin – here’s how

Save at home

• Electricity is one of the biggest expenses in your house and with increasing prices, you have to try to use less electricity. Use a timer to turn off your geyser for the largest part of the day and turn off everything in a room when you leave it, such as the lights and television. Wash clothes in cold water and try not to use the dryer. When you buy new appliances, buy those that use less energy.
• Water is also expensive. Save water by fixing leaking taps, use grey water for the garden and instead of having a long, full bath, have a short shower.
• Choose cheaper satellite and streaming television services.
• Maintain your house by regularly fixing cracks and broken gutters and keep your garden in good shape.

Save at school

• Buy generic school clothes at cheaper retailers.
• Buy expensive items such as blazers at the second-hand school shop.
• Buy school books at the school’s second-hand shop.
• Save on school fees by using your bonus to pay the full amount at the beginning of the year. You usually also get a discount for doing that.
• Pack school lunches instead of buying at the tuck shop.

ALSO READ: Things you wish you could tell your younger self about money

Stretch your rands at work

• Pack your own lunch for work instead of buying expensive take-aways.
• Rather take tap water in a bottle to work than buying bottled water.
• Start a lift club to save on fuel.

Save with having fun

• Find entertaining things to do that do not cost a lot, such as going on a picnic.
• Instead of buying new books, visit a library or second hand book store.