Our current economic climate has many of us couch diving for spare cash to help us get through the month. Luckily, there are better ways to make ends meet if you are willing to cut back for long enough to outlive what many predict to be a short-lived economic decline, said RE/MAX.
As tough as it might be, one of the worst things homeowners can do during this time is allow themselves to fall behind on their mortgage repayments and rack up debt by purchasing everyday items on credit. Rather than ruining your credit score for a temporary dip in the economy, try and cut back wherever possible so that you will be able to reap the rewards of your frugal living when our GDP takes its inevitable upward curve,” said Adrian Goslett, Regional Director and CEO of RE/MAX of Southern Africa.
In theory, it’s doubtful that many would disagree with this advice. But, in practice, it is about as helpful as telling somebody who is already drowning not to grab their only life line.
To help you find ways to stay afloat during these stormy times, Adrian suggested the following ways homeowners can cut back on their household expenses so that they do not have to grab onto any extra credit:
1. Set up a grocery budget
“Second to rent or bond repayments, food is one of the largest expenses of any household. Homeowners might have to change their shopping habits if they want to cut back on this expense,” said Goslett.
Ditch the ready-made-meals and buy ingredients in bulk instead. If you’re short on time during the week, prep and freeze your meals during the weekend so that you have cheaper homemade ready-meals during the week.
“Setting a strict grocery budget can also help homeowners avoid the temptation of popping unnecessary items into their trolley while browsing through the aisles,” Adrian added.
2. Lower your electric bill
Electricity is something we take for granted. When we come home, we expect there to be warm water in our taps and with just one click of a button have all our appliances switch on.
“But, you can significantly lower your electric bill by turning off your geyser during the day and unplugging all appliances when not in use so that they do not steal a phantom charge. Filling your fridge and freezer to its recommended capacity, installing energy-saving bulbs and dimmers, and washing your laundry in cold water are all useful ways to conserve electricity,” Adrian explained.
3. Reduce your cleaning supplies
Cleaning products are also an immense waste of household income. All you really need in your cleaning supply is bleach, vinegar, lemon juice, bicarbonate of soda or baking powder and a bottle of vanilla or rosemary essence if you want that fresh scent you find in cleaning products.
4. Cut fuel costs
“Fuel prices are at an all time high. Find ways to lower the number of kilometres you rack up each month by finding shopping centres en route to work instead of driving out on a Saturday for bread and milk. Find ways to make spending the weekend at home interesting so that you don’t feel tempted to go out and spend money: tackle household chores, have a picnic in your backyard, cycle around your neighbourhood – anything that doesn’t cost money.”
Giving up these little luxuries in life is a small price to pay for the freedom of living without the immense burden of bad debt. If this isn’t motivation enough to start saving, Adrian also reminded homeowners that in the current buyer’s market, now is probably the best time to purchase property, while interest rates are low and annual house price growth is the lowest it’s been for a number of years.
“Those who qualify for a bond and are able to set aside enough money to afford the transfer costs involved in most sales would do well to purchase property now,” he concluded.
