Feeling the pressure of repo rate, food and petrol price hikes? Here are 5 simple ways to cuts costs

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Expert shares measures to relieve your finance stress
Expert shares measures to relieve your finance stress
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These are lean times for most, with the price of debt, food and petrol leaving us with more month than money after each pay day.

“Motorists are now paying R26.74 per litre, this is the highest petrol price the country has ever experienced," says Standard Bank's Fayelizabeth Foster.

"Additionally, electricity tariffs have increased by almost 10% across major metros.”

What's a pressurised consumer who has already tightened their belt to the limit to do?

Small cuts and sacrifices in areas of your budget you never thought of can make big difference, cumulatively, says Foster.

Read more | Feeling short-changed by SARS? What you need to know about auto-assessments and how to get amendments

For starters, be energy efficient at home, she suggests.

“Despite persistent load shedding, the rise in electricity tariffs will result in an even bigger drain on your finances. So, you can look at ways of reducing your electricity and gas usage by being more efficient.”

“Are your outside lights burning brightly during the day, or your household members are having long, hot showers or baths in winter?" She asks.

Foster says most electric geyser thermostats are set to temperatures that are higher than necessary. The higher the temperature, the more electricity is required. “You can turn your thermostat down to 60°C to help save electricity,” she suggests.

“Taking a few practical steps to reduce your everyday energy usage in the home can put back an extra few hundred rand in your pocket each quarter.”

Foster suggests making these five simple changes to create additional cash flow and help you to withstand the price increases.

Cut back on luxuries and kick bad habits

"While that daily takeaway coffee may not seem like it’s hitting your wallet too hard, think again. Small purchases, made consistently, add up. Think about it: The average cost of a cappuccino sits at around R25, and if you’re in the habit of buying a takeout coffee daily during the week, it adds up to around R700 per month and R8 400 per year. By opting to be your own barista, and by taking advantage of specials on instant or ground coffee at retailers, you could make those cups of coffee at home for around R1 000 per year.

"Regular take-outs can also quickly increase your monthly food bill. An average meal for one person could cost close to R150 for the meal, delivery fee and driver's tip, whereas you could easily prepare a meal at home for four people for the same amount. If you get takeaways once a week, let’s say on a Friday, you are forking out over R600 per month and R7 200 per year.

"Of course, it is important to reward yourself and to be entertained. But there are ways to entertain yourself and your family. For example, cook a meal at home and watch a movie via one of the streaming services. By cutting down in some of these areas, you can save between R15 000 and R30 000 annually. That saving could cover petrol costs or school fees for the year, a well-deserved holiday, or six months’ worth of groceries."

Limit time on the road

"Car ownership has never been more expensive. But many South Africans rely on vehicles to travel to their workplaces and schools. If you own a car, there are some ways of limiting the amount it costs to fill up your tank.

"Ever since the arrival of Covid-19, employers have become more flexible with regards to when you’re in the office and when you’re not. If you’re able to work from home, you could potentially save a stack of money in transport costs. If you reduce your travel costs in a month by half, you can potentially save R800 to R2 000 per month. This equates to around R9 600 to R24 000 per year."

Forego the latest device upgrade

"Many people opt for a cell phone contract, where you are charged monthly for the device plus a data or airtime package, typically over a period of two years. Many of us have become used to upgrading our devices every two years even if the phone you have been using is still in good condition.

"Should you decide not to renew your contract and keep your 'old' device for another year or two post the contract expiry, you could be saving up to R1 000 per month or R12 000 per year. There will still be costs involved for airtime and data, but you can manage your data wisely and switch to Wi-Fi where possible to decrease the amount that you’re spending on data."

Launch a side hustle

"The new digital environment has made it easier to start up a business and to reach customers.

"If you do have a side hustle, decide how you are going to utilize your money from your side hustle: are you going to use the funds to build the business up, supplement your income or reduce debts?

"A side hustle could eventually be turned into a main hustle, one that employs people and contributes to growing the economy."

Think carefully before taking on debt

"While many people can’t avoid lending, try to avoid unnecessary lending, considering interest rates are on the rise. Indeed, there are times when consumers need to take on credit, but they can do it in such a way that doesn’t add to an existing financial burden.

Read more | Backbone of middle class – those aged 35-44, earning R20k-R35k per month – under most debt pressure   

"For example, many credit cards offer 32 days interest free. If you pay the money lent via the credit card back in that time, there’s no interest charged on that money. If possible, pay in more to your home or car loan. You will be amazed at how even a small payment can shorten the lifespan of those loans.

"It is also critical to rather take out loans from reputable organizations. Beware of lenders that will lend money without conducting credit checks and regardless of any financial problems that you may be experiencing. If you are struggling to meet your debt obligations, speak to a debt counsellor."

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