5 money-saving strategies you can implement in tough times like these
South Africa is officially in a recession, and Coronavirus could end up affecting every aspect of our lives in the coming months. 2020 is shaping up to be a tough year, and there has never been a more important time to try and save as much as you can, in preparation for what lies ahead.
It could be months before this all clears up, but the financial effects might linger for a few years.
Here are a few tips to help you save some money:
1. Cancel any credit card you don’t use
Do you have a bunch of credit cards that you don’t use, but get charged a fee for them, each month? Look at the lender who is giving you the best deal (reasonable monthly fee and favourable interest rates) and cancel the other cards.
2. Review all your debt obligations
Review all your debt (car finance, your bond on your house, personal loans etc) and see if you can get a more favourable interest rate elsewhere. If you’ve been making your debt repayments on time, each month, why not phone your credit provider and ask if they could perhaps reduce your monthly interest rate for the rest of the payment term? If you don’t ask, you don’t get.
3. Check your banking fees
How much does it cost you to bank?
When last did you check your bank fees? Charges just run off our account every month, and most of us simply overlook them. It’s really time to scrutinize these charges and shop around for the best deal. There could be a R3000 annual saving that comes out of your investigations.
Start with checking the type of bank account you have, and if that is suitable for your banking needs.
Picking a bank account that works for you starts with asking a few basic questions:
- What do I need from my bank and what am I prepared to pay them?
- How many cash withdrawals do I make every month?
- How many debit orders run off my account each month?
4. back on your entertainment budget
The idea with the Coronavirus is to limit your interaction with people (at least for the short-term), so what a perfect time to cut back on your entertainment spend. The small things make the biggest difference.
Things like cutting out the early morning coffees are worth at least R600 a month. Taking a packed lunch to work is worth another R1000 saving and deciding to stay at home for a few weeks and limit the brunches and lunches can easily add up to another R2000.
Entertaining at home costs way less than eating out, so invite a few Coronavirus free friends and family around for chow, once things look a little better in a few weeks’ time.
5. Review all your insurance policies
We all need insurance and comprehensive cover, especially in times like these. But nobody is stopping you from shopping around, so make sure that you have the best deal.
Get comparative short-term cover quotes if you haven’t had any claims in the past few years. Call your current insurer and ask if you can qualify for a discount or shop around for better premiums, via your broker or direct insurers. Just make sure it’s a like-for-like quote that you get because that’s the key to comparing apples with apples and making sure you don’t get burnt with an inferior product, simply because it’s cheaper.
6. Review your existing life cover but be careful when switching.
Life cover is based on a couple of risk factors that include what you do for a living and the types of activities you participate in.
If you haven’t reviewed your life cover in a few years, and some of your personal circumstances have changed (you’ve stopped smoking, you recently got married, your health has improved since you took out your cover, you’ve studied further, since applying for cover, and you’ve obtained a diploma or degree, you no longer travel much for work, etc) then maybe now is the time to do it.
In less than 100 days the entire mood of the world has changed. If nothing else, this Coronavirus pandemic has illustrated how quickly life can change.
Making sure you have enough saved up for times like these is critical. It all starts with being very aware of how you spend your money.
Be safe and be kind.
Until next time
The MoneyShop Team