1. Ditch expensive credit cards. Credit cards are great if you pay off what you spend in full each month. That way you get valuable consumer protection at no extra cost. But if you end up paying interest on them, it can increase the cost of your purchases – dramatically. So, if you owe money on your credit cards, find a 0% balance transfer deal. Set up a direct debit so you pay enough off each month, so that when the deal runs out, you will have cleared your debt. Don’t use that card for spending. Just use it to clear your debt.
2. Pay off debt fast. If you can’t get a 0% credit card, try and get rid of your credit card debt as soon as you can. The typical interest rate on a credit card is 18.9%, so the interest can really add up. Likewise, if you have a personal loan, you can overpay that to pay off your balance quicker.
3. Keep a spending diary. If you don’t know where your money goes each week or month, start keeping a spending diary. It just means you write down what you spend, when you spend it and what you spend it on. I’ve done this before and it’s an easy way of highlighting where you may be spending more than you want to!
4. Make your lunch – don’t buy it. Unless your employer provides free lunch or a heavily subsidised canteen, it’s much cheaper to make lunch than buy it. I’ve never really liked sandwiches and prefer to eat soup, salad or something like a risotto at lunchtime. It does require a bit of organisation in advance, but – like anything – once you’ve got a system up and running it sort of runs itself. If you normally spend R50 on a meal deal lunch every day, you’ll save R250 a week, minus what you spend on making your lunch. If you spend more than this, the savings will obviously be greater.
5. Switch your mortgage. If you’re on your mortgage lender’s standard variable rate deal, go online, use a digital mortgage broker or talk to a mortgage broker (by phone or face-to-face) to find out how much you could save. If you’re on a fixed rate mortgage, it may still be worth switching, even if you have to pay an early repayment charge to get out of your deal. It will depend on the size of the penalty, the size of your mortgage and the interest rate you’re on.
There are lots of other ways you can save, such as by shopping around for insurance and your bank account, etc.
Where to start
I’ve given a list of five areas where you can save money. I’d suggest that you start with the area where you can save the most, because this will give you an incentive to make further changes.