Setting up a household budget
A few lifestyle expenses homeowners should consider when trying to find ways to cut their expenses.
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Following the latest interest rate bump, homeowners could be spending thousands of rands more each month just to keep up with the repayments on their home loans. This could leave many homeowners looking for ways to cut back to make up for their higher debt repayments.
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Regional Director and CEO of RE/MAX of Southern Africa Adrian Goslett explained that accurate budgeting will become more and more important to homeowners in order to make sure they stay on top of all their repayments.
Setting up a monthly budget – and sticking to that budget – is a vital component of homeownership,” he noted.
“Purchasing a home is one of the largest purchases a person will make in their lifetime, so it is important to make provisions for how you plan to continue to afford the purchase.”
Setting up a household budget will also allow homeowners to see exactly where their money is going each month.
“The visual representation of a monthly budget makes it easier to identify where money is being spent unnecessarily, which helps when the need arises to cut back on expenses,” Adrian explained.
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With interest rates being as high as they are, Adrian also challenges homeowners to cut back as much as they can so that they can even afford to pay extra on their home loans.
“Debt is incredibly expensive right now. If you can find a way to pay in extra on your home loan repayments, you could end up saving hundreds of thousands in interest charges over the span of the loan term.”
Those who are struggling to find ways to cut back are encouraged to rethink some of their lifestyle choices.
As difficult as it might be, homeowners will need to start changing their spending habits to make ends meet,” he advised.
Below are a few lifestyle expenses homeowners should consider when trying to find ways to cut their expenses:
• If you don’t already, start purchasing groceries in bulk to cut down on your monthly food bill – and avoid buying fast food, takeaway coffees, or eating out. The average cost of a takeaway coffee is around R30. If you do this daily, five days a week, you’re spending around R600 a month just on coffee.
• If you need new clothing, consider thrift stores or second-hand items sold through Facebook Marketplace. Avoid buying anything on store credit (unless they’re interest-free accounts) and, if possible, pay these off as soon as you can and close the accounts.
• Cancel any unnecessary subscription services. These days, it is common to have subscriptions to multiple streaming services. Try to limit your household to just one at a time to save a couple of hundred rands each month.
• If your cell phone contract is nearing its end, switch to pay-as-you-go instead of opting for an upgrade.
• Shop for cheaper brands. It is worth finding cheaper alternatives for your daily consumables, such as perfumes, deodorants, make-up, cleaning and food supplies, as this will go a long way to helping you reduce your monthly expenses.