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Cutting down on expenses is never a comfortable exercise. However, the benefits and rewards are greater than the sinking feeling that there is no hope when it comes to your budget. Yes, a little bit of sacrifice can mean a lifetime of rewards and financial stability and comfort for you and your family.
So how do you start your journey to financial freedom?
1. Tighten your budget
Always look for areas in your budget that you can cut down on. These could be things such as:
- Entertainment: you don’t need to go out every weekend and if you do, you don’t have to go out to the most expensive clubs or buy the most expensive cocktails.
- Eating out: you can cut down on this cost immensely by buying take-aways instead or going to restaurants less often.
- Telephone bill – re-look at how many calls you make per month, do you really need to have that business contract or did you just want the fancy phone? You can go on the “pay as you go” or limited usage contract. Shop around for the best money saving deal for you based on your usage.
- Electricity: look at how you can save on your electricity bill. With winter here and the electricity rates going up, this is becoming a major spend item per household. Look at using gas heating, switching off your geyser during the day, switching off lights unless you are in the room, using energy efficient bulbs etc.
- Water: save on water by showering instead of bathing, don’t leave the water running while brushing your teeth and if you can, invest in the dual flush toilet.
- DSTV: look at what you watch on your premium subscription, if you can get the cheaper subscription and still have your favourite programs, why pay the higher premium?
- Junk food: avoid buying canteen food by preparing your own lunch for work and order less junk food per week. It will be cheaper and probably healthier.
2. Use less petrol
With petrol prices constantly rising, using less will not only be good for the environment, it will also make less of a dent in your pocket. You can:
- Car pool: find out who you can travel to work with. By sharing the petrol costs, it will cost less for you on petrol and car maintenance if you also take turns driving.
- Make necessary trips only: limit the numbers of times that you have to go to the store e.g. don’t just go to buy bread or walk to the corner shop instead of driving there if you can.
- Traffic: avoid being stuck in traffic as this uses more petrol. Leave earlier for work, and later for home if you can.
- Cycling: not only will this be good for your health, but it will cost you nothing apart from the cost of the bicycle and you will not have the same maintenance expenses as you would have for a motor-bike or a car.
3. Reduce your spending on credit
Your spending motto must be “if I can’t pay cash for it, I cannot afford it”. However this may not always be practical. So if you must spend on credit make sure you are a disciplined spender, and you pay off your debt as quickly as possible to avoid paying too much.
- Close your store accounts as the interest that you pay on these can cost you as much as 32% per annum. If you must buy on credit use the interest free 6 month options offered by most stores and pay it off in six months to avoid interest charges and penalties.
- When you use your credit card, pay off the purchase in 55 days to avoid interest charges.
4. Reduce cost on food
Compare shops for the best deals. Also use coupons or rewards programmes to cut down on costs. Buy house/no-name brands instead of the branded products if they are cheaper.
5. Cut out unnecessary spending
There are various activities and items that are quite costly and end up costing more in the long term such as smoking, drinking and shopping. Try to:
- Quit smoking: not only will this save you money in the short term, but it will improve your health, cost you less on life insurance and on medical aid.
- Cut down on alcohol consumption: especially the overly expensive brands. Again this will save you costs in the short term and long term due to less health complications and driving under the influence arrests.
- Cut down on the shopping sprees: only go shopping when you are in a hurry, it stops you from buying unnecessary things. Avoid window shopping, as you will be enticed by the sale items and that “gorgeous bag that will go so well with your red dress”.
Before making any changes to these items and for other ways that you can make them cost effective, make sure to consult your financial adviser to help you make the best decision.
So how do you start your journey to financial freedom?
1. Tighten your budget
Always look for areas in your budget that you can cut down on. These could be things such as:
- Entertainment: you don’t need to go out every weekend and if you do, you don’t have to go out to the most expensive clubs or buy the most expensive cocktails.
- Eating out: you can cut down on this cost immensely by buying take-aways instead or going to restaurants less often.
- Telephone bill – re-look at how many calls you make per month, do you really need to have that business contract or did you just want the fancy phone? You can go on the “pay as you go” or limited usage contract. Shop around for the best money saving deal for you based on your usage.
- Electricity: look at how you can save on your electricity bill. With winter here and the electricity rates going up, this is becoming a major spend item per household. Look at using gas heating, switching off your geyser during the day, switching off lights unless you are in the room, using energy efficient bulbs etc.
- Water: save on water by showering instead of bathing, don’t leave the water running while brushing your teeth and if you can, invest in the dual flush toilet.
- DSTV: look at what you watch on your premium subscription, if you can get the cheaper subscription and still have your favourite programs, why pay the higher premium?
- Junk food: avoid buying canteen food by preparing your own lunch for work and order less junk food per week. It will be cheaper and probably healthier.
2. Use less petrol
With petrol prices constantly rising, using less will not only be good for the environment, it will also make less of a dent in your pocket. You can:
- Car pool: find out who you can travel to work with. By sharing the petrol costs, it will cost less for you on petrol and car maintenance if you also take turns driving.
- Make necessary trips only: limit the numbers of times that you have to go to the store e.g. don’t just go to buy bread or walk to the corner shop instead of driving there if you can.
- Traffic: avoid being stuck in traffic as this uses more petrol. Leave earlier for work, and later for home if you can.
- Cycling: not only will this be good for your health, but it will cost you nothing apart from the cost of the bicycle and you will not have the same maintenance expenses as you would have for a motor-bike or a car.
3. Reduce your spending on credit
Your spending motto must be “if I can’t pay cash for it, I cannot afford it”. However this may not always be practical. So if you must spend on credit make sure you are a disciplined spender, and you pay off your debt as quickly as possible to avoid paying too much.
- Close your store accounts as the interest that you pay on these can cost you as much as 32% per annum. If you must buy on credit use the interest free 6 month options offered by most stores and pay it off in six months to avoid interest charges and penalties.
- When you use your credit card, pay off the purchase in 55 days to avoid interest charges.
4. Reduce cost on food
Compare shops for the best deals. Also use coupons or rewards programmes to cut down on costs. Buy house/no-name brands instead of the branded products if they are cheaper.
5. Cut out unnecessary spending
There are various activities and items that are quite costly and end up costing more in the long term such as smoking, drinking and shopping. Try to:
- Quit smoking: not only will this save you money in the short term, but it will improve your health, cost you less on life insurance and on medical aid.
- Cut down on alcohol consumption: especially the overly expensive brands. Again this will save you costs in the short term and long term due to less health complications and driving under the influence arrests.
- Cut down on the shopping sprees: only go shopping when you are in a hurry, it stops you from buying unnecessary things. Avoid window shopping, as you will be enticed by the sale items and that “gorgeous bag that will go so well with your red dress”.
Before making any changes to these items and for other ways that you can make them cost effective, make sure to consult your financial adviser to help you make the best decision.
