If there’s one thing almost everyone agrees they should be doing, it’s spending less and saving more.
Of course, that’s easier said than done, especially when budgets already seem tight – but there are some straightforward steps that can make the task easier.
We offer some straightforward South African tips for saving money in 2023.
1. Make paying yourself a priority
Probably the very best tip for saving money is to pay yourself first. Aim to save at least 10% of your earnings before tax.
If you think of your savings like you would any other bill, you’ll ensure that saving becomes a habit and start building that emergency fund or nest egg.
A good way to force yourself to save is to automate the process. Set up a direct debit so that a certain amount of money is moved directly from your income to a separate savings account at the start of each month.
2. Start tracking how you spend
Just by watching where you spend your money, it’s likely that you’ll start spending less. Begin by noting how much money you spend daily and what debit orders you have in place, so you can determine your current spending habits.
Then decide which of your expenses are needs versus wants. Remember, your needs come first. If there’s extra money to spend after you’ve saved a predetermined amount, you can spend it on your wants.
A template, such as one of these free personal budgeting templates from Microsoft, may help you track and manage your budgeting.
3. Review medical aid and insurance policies, and bank charges
You may be able to save thousands of rand a year by reviewing your medical aid, insurance and bank charges annually, and either negotiating better rates or shopping around for better offers.
It’s worth trying to negotiate better rates or shopping around for better offers on:
- medical aid
- home building insurance – also update and re-examine your household inventory to avoid over-insuring your possessions
- car insurance, given that the market value of your car will depreciate each year
- bank fees, including facility and credit fees; don’t be afraid to ask about the different products on offer and how fees are bundled.
You can also reduce costs by avoiding other banks’ ATMs and, where possible, signing up for automatic bill paying, to avoid any late fees.
4. Reduce phone costs
Note how much time you spend on your phone for a few days, tracking the calls you make and the data you use. Then investigate whether you’ve got the best possible package/plan.
Also, consider switching off your phone at certain periods of the day and check for and remove any apps that use data without you even knowing. The savings that result could add up to hundreds of rand.
5. Watch your car expenses
Regular maintenance of your car ensures it lasts longer and may help you avoid major costs three or four years down the line.
Currently, South Africans spend more of their salaries on petrol than most other nationalities. So also do what you can to reduce your fuel costs.
For example, save on petrol by:
- planning routes and combining tasks to minimise number of trips
- have your car serviced at the recommended intervals (but shop around for a good deal on servicing)
- have your vehicle’s wheel alignment checked and keep your tyres at the optimal inflation to minimise resistance
- close your car windows when driving to reduce drag
- reduce your car’s weight by clearing the boot of unnecessary items
- keep your speed to a minimum to reduce wind resistance
- use the air conditioning sparingly.
If you have the opportunity to move so you can live closer to work, do so. It makes sense to invest what you can in a home, which is an appreciating asset, rather than spending on petrol and vehicle maintenance.
6. Manage your grocery spending
Once you’ve figured out your monthly budget, you’ll know how much you can afford to spend on groceries.
Stick to this limit by planning your meals in advance, listing what you need to buy and then buying everything in one trip.
Try this article for some useful tips for planning meals on a budget.
Limiting the duration and number of shopping trips you make is key to avoiding temptations and unnecessary spending.
Also, be both wary and aware of specials. They can be useful if they’re on goods you’d buy anyway. However, they can also lead you into impulse buying.
You can monitor grocery specials online, for example at:
7. Reduce spending on electricity
Eskom’s electricity prices increased by roughly 653% between 2007 and 2022 (while inflation over that period was 129%).
You can reduce your electricity costs by following common-sense tips like these:
- limit how often you open the refrigerator and ensure you close it as soon as possible after opening it
- switch to energy-efficient bulbs
- when it’s time to replace appliances, invest in ones with high energy efficiency ratings
- reduce the temperature of your geyser to 55°C or less and consider installing a timer on it (or switch off and on again manually)
- switch off the TV, appliances and lights when not using them
- insulate your home properly – this can save dramatically on heating and cooling costs
- run full loads in the washing machine and dishwasher, and use cold water where possible.
8. Pay off credit card debt
Credit card debt can be taxing on your psyche. So halt your credit card spending and focus on paying off debt, one card at a time.
Organise cards by interest rates, from highest to lowest, and pay off the card with the highest rate first.
Pay as much as you can every month. Also, see if you can make a dent in your debt by paying more than the minimum balance. This will reduce the interest you have to pay.
9. Switch to a healthier lifestyle
Bad habits can be expensive.
For example, a single pack of cigarettes in South Africa can cost as much as R53, for a premium brand. Someone who smokes a pack a day at that price would save roughly R1,590 a month, or R19,080 a year, by quitting. Even savings of half that value could be put to good use.
The same can be said for daily alcoholic drinks, sweet treats and expensive cappuccino habits. If you manage to quit bad habits, the money that you would have used on them can be used toward paying for other expenses.
You may also become eligible for lower life insurance premiums and, over the long term, spare yourself from various illnesses.
10. If you have a home loan, pay in extra
Paying even a few hundred rand extra per month towards your bond can:
- significantly reduce the total interest you pay on the bond
- shorten your bond repayment period.
Try this online additional payment calculator to get a rough idea how much you can save over the long term by tipping a little extra into your monthly home bond repayments. Note that in practice, this amount will be affected by the particular terms of your home bond.
11. Pick up some simple DIY skills
Certain home and car maintenance tasks are best left to professionals.
However, with so much information available online, there are plenty of maintenance tasks you can perform yourself – at much lower cost than a contractor is likely to charge you.
If you don’t succeed in fixing a problem yourself, you can always go ahead and call the specialist.
Some useful links for saving money through DIY repairs:
- How To Change a Tap Washer
- Find and Repair Hidden Plumbing Leaks
- 32 Super Easy Home Maintenance Tips That Will Save You BIG Money
- Car Paint Repair: Get Touch Up Painting Done in 4 Quick Steps
- 13 Car Maintenance Tasks You Can DIY To Save Money.
12. Be patient with yourself
It’s unlikely that you’ll be able to follow a strict budget 100% of the time, no matter how disciplined you are.
Stay realistic, forgive yourself for small errors and build occasional treats into your accounting. This way you’ll ensure you’re in the healthiest mindset to get back on track, as soon as possible.
Getting a loan from Lamna
Even if you generally follow our South African tips for saving money in 2023, there may be times when you need a bit extra to cover unexpected costs.
At Lamna, we offer fast, discreet loans against the value of a wide range of assets, from luxury watches and jewellery to vehicles or artwork.
Client borrows R10,000 for 90 days.
Total Cost of Loan
Fixed rates range from 36% to 60% APR and payment terms range from a minimum of 3 months to a maximum of 24 months. Apart from the initiation and monthly fees shown in the table, the only additional fee is credit life insurance if the borrower does not have this already.
Lamna offers fast, reliable cash advances on real estate commission – a lifeline for South African estate agents waiting for property transfers to be registered.
High inflation is making it harder to budget every month. Navigate costs with our tips for dealing with rising food inflation in South Africa in 2023.